Spain's economy might grow in Q3 of 2013: Bank of Spain

Updated: 2013-06-21 05:39:00

(Xinhua)

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MADRID, June 20 (Xinhua) -- Governor of the Bank of Spain, Luis Maria Linde, said on Thursday that the Spanish economy might return to growth in the third quarter of 2013.

Linde made this statement in a speech to the economic committee at the Spanish Parliament where he explained Spain's central bank annual report of 2012.

Linde argued that the worst part of the recession had been left behind, as the Spanish economy shrank by high rates at the end of 2012, but stated that in the third quarter Spaniards "could see positive growth rates".

"2012 was one of the most difficult years for the Spanish economy over the last decades," he said, and assured that last data demonstrated that Spain's gross domestic product (GDP) would contract less in the following quarters.

Linde praised the fact that the European Commission (EC) had left Spain more time to meet the deficit target because in his opinion it will slow down the contraction of the Spanish economy which is caused by the fiscal adjustment.

Therefore Spain's economy could experience growth between July and September, when also the country receives the highest number of tourists that helps to boost its economy.

Linde encouraged the government to continue with the reforms because in his opinion these measures are setting the economy on a recovery path, although he warned the banking crisis is not over yet and "there are still risks and uncertainties".

Linde explained that the economic recovery is not possible if banks do not give credit, while warning they should assure their solvency.

Meanwhile, president of the Spanish Banking Association Miguel Martin assured on Thursday that Spanish banks have as the main strategic objective to give credit to firms and small and medium-size enterprises.

Last week Spain's Prime Minister Mariano Rajoy launched a message to the banks, saying they had to give credit to business and individuals, because the government had done what needed to be done to boost growth and it was the bank's turn to help the country's economic recovery.