The Bank of Spain confirmed yesterday that the Spanish economy is no longer in a recession as of the third quarter as it grew 0.1% after two years of steady negative GDP growth. The recession is over, but a long road to recovery lies ahead before Spain's economic crisis ends. There are numerous signs that show that Spain, which is the fourth largest economy in the euro zone, is starting to heal. For example, foreign investors have regained confidence in Spanish public and private debt.
Further, GDP is growing thanks to strong exports, and some people are saying that the nation's economic structure is changing. It is too soon to suggest that that is the case, although the government is eager to spread the good news. Rising consumer spending is a sure sign that the growth trend is starting.
If exports keep growing more than imports, then our companies will have bucked the trend. And this wouldn't be strange because many small- and medium-sized businesses -- not just the big companies -- have found out that foreign markets offer many opportunities to diversify and task risks. After getting through the first part of a difficult crisis, Spain's smartest option is to keep making the most of recovery efforts.
Unemployment is still a major problem, although it looks like today the EPA will issue better numbers than it has in recent quarters. Cutbacks in the labor market have been so important that a few tenths of a point in GDP growth could end layoffs and a full percentage point of growth could even create jobs. We should not celebrate too soon, of course, but there are reasons enough to have a temperate optimism about the future of the economy.
