"Recent data flow has shown quite an improvement... consistent with some stabilisation in GDP, but not yet consistent with growth,"
- Economist at Deutsche Bank Gilles Moec
The recession in Spain, Europe's fourth largest economy, probably, eased in the second quarter and the economy is showing signs of stabilization, Bank of Spain estimate's showed Tuesday. According to official figures, the economic output shrank just 0.1% quarter-on quarter between April and June, much slower than a 0.5% contraction seen in the first quarter. On a yearly basis, Spanish economy shrank 1.8% in the June quarter, following a 2% decline in the prior quarter. The main reason for the improvement was strong exports of goods and services, as well as slower decline in domestic demand, which also contributed to figures. Nonetheless, the majority of analysts suggests the economy will shrink 1.7% this year, while the International Monetary Fund projects a 1.6% contraction this year for Spain, and mentioned possible stagnation in 2014. Even despite some signs the recession may end soon, the nation's outlook remains difficult.
Also this week Spanish Prime Minister Mariano Rajoy said he would appear before the parliament to answer questions over a corruption scandal, easing pressure from the opposition, which claimed its readiness to introduce a no-confidence vote if he refused. Previously, Rajoy's People's Party had used its strong majority in the parliament to avoid his appearance, as he denied any involvement in the scandal.
© Dukascopy Bank SA