Some positive hope on the horizon...perhaps....
Taken from
The Guardian
By Andrew Hay
MADRID, April 16 (Reuters) - The Spanish economy should start to recover from a sharp slowdown in the second half of next year and return to around 3 percent growth in 2010, Economy Minister Pedro Solbes said on Wednesday.
"In the second half of 2009 we should see the situation begin to normalise and in 2010 we should return to growth rates closer to, or around our potential GDP," Solbes told a banking conference in Madrid.
The Spanish economy has outperformed euro zone rivals for a decade as a property and construction boom pushed average growth to around 4 percent, well above its potential rate of 3-3.5 percent.
The euro zone's fourth largest economy is now slowing sharply as it suffers the twin shocks of money market turmoil and a rapid fall in housing demand.
The International Monetary Fund expects Spanish growth to slow to 1.8 percent this year from 3.8 percent in 2007.
Solbes said the IMF estimate appeared too pessimistic.
He said first-quarter growth would be below the 3.5 percent rate set in the fourth quarter. He did not give an forecast for the full year.
The Bank of Spain sees 2008 growth at 2.4 percent. Solbes last month told Reuters estimates between this level and 2.7 percent appeared reasonable.
The government, which was re-elected in March, has yet to revise its official 3.1 percent growth estimate for 2008.
The government plans to inject 10 billion euros ($15.83 billion) in tax cuts and business loans into the economy to overcome liquidity problems and stimulate growth.
Bank of Spain Governor Miguel Angel Fernandez Ordonez, fearful of inflationary pressure, on Tuesday urged the government to put limits on public spending and tax cuts.
Solbes said he would keep up fiscal discipline that allowed the government to run a budget surplus equal to 2.2 percent of GDP in 2007, the second highest in the euro zone.
"Our objective should be that when we start to grow again around 3 percent within a few quarters, the end of 2010 or the beginning of 2011, the surplus should return to around 2 percent of GDP," said Solbes.