Spain’s economy will grow by 1.2 percent in 2014 after shaking off a long, job-destroying downturn, the nation’s central bank predicted Wednesday.
The bank’s outlook for Spain, which boasts the eurozone’s fourth-largest economy, paints a picture of gradual, modest recovery with stubbornly high rates of unemployment.
“After the start of the recovery observed in the second half of 2013, we predict that the Spanish economy will continue to progress through this year,” the Bank of Spain said in its monthly bulletin.
Following a 1.2-percent economic contraction in 2013, the central bank said it was tipping gross domestic product growth of 1.2 percent this year and 1.7 percent in 2015.
If correct, that would mean Spain is set for the fastest economic growth since 2007, just before a property crash plunged the nation into five years of stop-start recession, wiping out millions of jobs and plunging the nation’s banks, companies and consumers deep into debt.
Growth would not be strong enough, however, to make a big difference to the unemployment rate, which topped 26 percent at the end of 2013.
The Bank of Spain predicts the unemployment rate will ease to 25.0 percent this year and 23.8 percent in 2015.
Prime Minister Mariano Rajoy’s conservative government has issued slightly less optimistic economic forecasts, predicting growth of 1.0 percent in 2014 and 1.5 percent in 2015.
Spain’s government is predicting economic growth in the first quarter of this year will be at least as fast as the 0.2-percent pace recorded in the final three months of 2013.
The central bank, too, said the recovery appeared to be on track early this year.
“Economic indicators for the first quarter of 2014 point in general to a continuation of the gradual improvement in activity,” the Bank of Spain said.