According to economists Spain will drag itself out of recession in 2014 and will see growth accelerate in 2015 as the European Union eases its demands for austerity measures.
Forecasts are predicting that economic output in the struggling country will show signs of growth for the first time since 2011 in the first quarter of 2014 and will expand by 0.5% over the course of the year. The new forecast is an improvement on previous estimations of a 0.3% expansion next year. In 2015 the Spanish economy is expected to grow by 0.9%.
The improving forecasts come after Spanish Prime Minister Mariano Rajoy managed to persuade the European Commission to ease its deadline for Spain to bring its budget deficit within EU boundaries. Rajoy managed to buy the country an extra two years of time to help support growth.
With austerity crippling the possibility of growth in the Eurozone’s struggling economies it appears that finally the European Commission has come to its senses by easing up on its insistence for punishing measures.
Austerity imposed by the International Monetary Fund, European Central Bank and the commission has seen up to 17% of output being wiped from the Greek economy and just as large declines for the Spanish, Italian, and other struggling economies.
“There is an expectation that the fiscal consolidation will be less of a drag than before,” said Luigi Speranza, an economist at BNP Paribas SA in London.
For the Eurozone as a whole, economists are forecasting that the single currency region will contract by 0.6% this year before growing by 1% in 2014.
Euro (EUR) Exchange Rates
As of 11:32 am GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3331 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8509 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3960 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6654 <