MADRID—The Spanish economy returned to growth in the fourth quarter, as consumer spending picked up and exports surged, data from the National Statistics Institute, or INE, showed Wednesday.
Gross domestic product rose by 0.2% in the fourth quarter from the third, the INE said in a statement, confirming an estimate it gave Feb. 11. Fourth-quarter GDP increased by 0.6% compared with a year earlier, and GDP for the whole of 2010 fell by 0.1%, the INE said.
Exports of goods rose by 5.3% in the fourth quarter, and service exports increased by 1.1%, benefiting from strong demand in other European Union countries, Spain's main export markets.
The Spanish economy had stagnated in the third quarter under the weight of a new round of austerity measures. It remains one of the euro zone's weaker economies as it struggles to recover from the collapse of a decade-long construction boom. With unemployment at 20%, households and companies are sharply reining in spending and investment.
Still, Spain performed better than some of Europe's other weak economies, which, like Spain, have suffered a dramatic increase in borrowing costs over the last year. Portugal's GDP contracted 0.3% in the fourth quarter from the third, while Greece's GDP decreased by 1.4%.
"Spain's final fourth-quarter GDP release confirmed that the economy outperformed its southern European counterparts at the end of last year," said Ben May at Capital Economics.
The INE said Spanish consumer spending rose by 0.3% in the fourth quarter, after falling by 1% in the third quarter as the result of a value-added-tax rise.
Maria Jesus Fernandez, an economist at the think tank Funcas, said fourth-quarter consumer spending was weaker than Funcas had expected, while exports were stronger. "Domestic demand remains very weak," Ms. Fernandez said. Funcas expects Spain's slow recovery to continue this year, with GDP rising by 0.8%.
Source: Wall Street Journal