Spain's economy grew 0.2 percent during the fourth quarter thanks to a pick-up in exports, the central bank said Friday, good news for a country trying to dispel fears it might need a bailout.
The Bank of Spain said that because of the slight recovery at the end of the year, gross domestic product fell only 0.1 percent during the whole of 2010, less than the 0.3 percent decline officially forecast in the latest budget.
The bank's quarterly GDP figures are preliminary. They are usually followed a week later by official numbers from the National Statistics Institute, although these tend to agree with the bank's.
Spain is struggling to recover after nearly two years of recession, prompted in large part by the collapse of a credit-fueled spending spree and real estate bubble.
Its GDP finally posted modest growth in the first two quarters of 2010, then was flat in the third. The government had said last week it expected the final figure for all of 2010 to be better than its forecast of a 0.3 percent contraction.
The 2010 GDP decline is tiny compared to the 3.7 percent drop that Spain's output suffered in 2009 but is still much worse than some other European countries — Germany's economy grew last year at the fastest pace in over two decades.
"The weak progress in the economy over the course of the year contrasts with higher increases posted in other countries of the eurozone, which shows the greater extent of the crisis in Spain and the impact that the necessary reform process is having on short-term growth rates," the bank's report said.
The bank said household consumption was hit last year by austerity reforms which include a rise in VAT sales tax and a cut in civil servant wages and government spending.
The slightly better-than-expected performance for all of 2010 is due mainly to a rise in exports as a proportion of GDP, the bank said.
Among other reforms, Spain last year overhauled its rigid labor market laws to try to encourage companies to hire, although the jobless rate is still just over 20 percent, a eurozone high.
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