Economy gets worse – Numbers game shows Spanish pain

DOWN: Spanish industrial output fell 6.5 per cent in February as economy contracted.

THE pain keeps on coming for the Spanish economy. The national government has revised down growth figures just as unemployment topped 6 million.

Madrid now expects the economy to contract by 1.3 per cent in 2013, as opposed to a previous estimate of a 0.5 per cent fall. But Madrid is pinning its hopes on a turn around in the economy and is forecasting a return to growth in 2014, despite industrial production plunging 6.5 per cent in February.

The government hopes that a package of stimulus measures will provide the boost needed after severe austerity measures saw the economy go backwards.

Last year the economy contracted by 1.37 per cent, the second-worst annual decline since 1970. Tough austerity measures to cut the deficit and save the country €150 billion by 2014 were put in place in an effort to bring debt under control.

Now Spain hopes to hit its 3 per cent deficit target – set by the EU – in late 2016, two years later than planned. That is a way of slowing down more spending cuts, which many feel have harmed the economy as much as helped control debt.

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