Madrid - AFP
The Spanish government plans to raise its economic growth forecast for next year to 0.7 percent from 0.5 percent, Prime Minister Mariano Rajoy said Tuesday, the latest sign that the outlook for the eurozone\'s fourth-largest economy has improved. The updated growth forecast will be part of new official economic targets that will be released on Friday after cabinet approves the 2014 budget, he said during a debate in parliament. \"We will present a draft state budget for next year and we will prudently raise the growth forecast from 0.5 percent to 0.7 percent even though the consensus of analysts is of growth of around one percent,\" Rajoy said. Rajoy forecast Spain would post growth of between 0.5 and 1.0 percent in 2014 in an interview published Tuesday in the Wall Street Journal. He also said that the country emerged from recession in the current quarter, with estimated economic growth of 0.1 to 0.2 percent. \"Spain is out of recession but not out of the crisis,\" the newspaper quoted him as saying. \"The task now is to achieve a vigorous recovery that allows us to create jobs.\" Spain has been reeling from a double-dip recession brought on by the bursting of a housing bubble in 2008. The unemployment rate is currently forecast to stand at 27.1 percent at the end of this year and 26.7 percent in 2014. It dipped to 26.2 percent in the second quarter of this year thanks to summer hirings. Rajoy\'s conservative government has vowed to haul in its budget deficit and has imposed tough budget cuts and tax hikes to that end since taking office in late 2011. The government\'s previous forecasts had tipped a 1.3-percent contraction in overall economic output in 2013. Rajoy said he expected Spain would not need to extend into 2014 a eurozone bailout programme for its banks from which it drew 41.3 billion euros last year, helping to stabilise the sector.