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Tuesday, December 6, 2016

MADRID (AFP) – Spain has emerged from recession in the third quarter, with estimated economic growth of 0.1 to 0.2 percent, Prime Minister Mariano Rajoy said in a newspaper interview Tuesday.

He also forecast growth of between 0.5 and 1.0 percent in 2014, stronger than the government’s previous estimate, in an interview published in the Wall Street Journal.

“Spain is out of recession but not out of the crisis,” the newspaper quoted him as saying. “The task now is to achieve a vigorous recovery that allows us to create jobs.”

Spain, the eurozone’s fourth-biggest economy, is reeling from a double-dip recession brought on by the bursting of a housing bubble in 2008.

The unemployment rate is currently forecast to stand at 27.1 percent at the end of this year and 26.7 percent in 2014. It dipped to 26.2 percent in the second quarter of this year thanks to summer hirings.

Rajoy’s conservative government has vowed to haul in its budget deficit and has imposed tough budget cuts and tax hikes to that end since taking office in late 2011.

It is due to publish its official economic targets when it approves the 2014 budget on Friday.

The government’s previous forecasts had tipped a 1.3-percent contraction in overall economic output in 2013 before a return to growth of 0.5 percent in 2014.

Rajoy said he expected Spain would not need to extend into 2014 a eurozone bailout program for its banks from which it drew 41.3 billion euros last year, helping to stabilize the sector.

Photo Credit: AFP/Jaime Reina

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