Bank of Spain Governor Luis Maria Linde signaled the country’s economy may start to grow in the third quarter, backing claims by the government that an economic slump in its sixth year may be ending.

“The sharpest declines of output occurred at the end of last year and the most recent data signal a moderation of the pace of the contraction, which, at the end of the year, and even starting from the third quarter, may give way to positive growth,” Linde told a Spanish congress committee today.

Prime Minister Mariano Rajoy has claimed the economy is on the right track to emerge from recession as he counts on exports to fuel a return to growth in the second half of the year and the European Commission grants the country more time to trim its budget deficit. In a report yesterday, the International Monetary Fund said its base case for Spain showed the economy returning to economic growth later this year that would reach an expansion rate of about 1 percent in the medium term.

Linde called on the government to continue with its efforts to make Spain’s economy more efficient by reforming pensions and making labor laws sufficiently flexible.

“We’re on the right path for growth to recover and to create jobs,” said Linde. “To succeed, however, it’ll be fundamental not to abandon reform policies to increase our economy’s flexibility and gain competitiveness.”