Economy gets worse – Numbers game shows Spanish pain

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.