Madrid: Spain's anaemic growth rate may slow further in the third quarter, though the country harbours hopes of soon reviving some of the infrastructure projects it mothballed under an austerity drive, its prime minister said.
While Spain's priority remained getting its fiscal house in order, Jose Luis Rodriguez Zapatero said yesterday he hoped to announce the relaunch of some public works schemes in the next 10-15 days.
Government austerity measures introduced in the spring to help rein in a soaring budget deficit included over 6 billion euros of cuts to public projects.
Speaking in Palma de Mallorca, Zapatero cautioned that the economy may expand at a slower rate this quarter than the 0.2 per cent estimated by the Bank of Spain for the second quarter, which he said was in line with the government's own forecast.
The government believed "the conditions are in place for economic recovery," he said "... [But] we have to see what happens in the third and fourth quarter ... It's foreseeable that the third quarter is not as strong as the second."
The austerity measure adopted since the beginning of May, and the publication of stress tests on European banks — which five Spanish savings banks failed — had contributed to an easing of market pressure on Spanish debt.
"This should be seen in improved financing in the economy and for businesses. It will be a slow process ... Financial stability is essential for the recovery to continue in the coming quarters," Zapatero said.
"The cut in infrastructure has been very sharp. We have listened to the concerns of the sector and the autonomous regions ...We are working towards alleviating these cuts."
