By MARJORIE OLSTER
WASHINGTON (AP) â¿¿ Spain is emerging from years of recession but will need to boost growth significantly to "make a real impact" on one of the highest unemployment rates in the European Union, its economy minister says.
Luis de Guindos told The Associated Press in an interview Thursday that he expects third-quarter data on Spain's gross domestic product, set to be released around the end of the month, to be slightly positive after eight straight quarters of contraction and four years of almost continuous recession.
"This is the beginning of the end of this crisis," he said. "Next year, we are going to see an important reduction in the unemployment rate" for the first time since the downturn began in 2008.But the tepid growth rate of 0.7 percent forecast for all of next year would not be enough to really make a dent in 26.2 percent unemployment â¿¿ a rate topped only by Greece in the 28-member EU. "In Spain, we have a horrible employment situation. The unemployment rate is totally unacceptable," he said, especially youth unemployment. Asked when the rate might fall below 25 or 20 percent, de Guindos did not reply directly but said the "evolution of employment" is more important than the rate. "Growth has to be enhanced in order to make a real impact on the employment dynamics of the labor market in Spain," he said on the sidelines of the International Monetary Fund/World Bank meetings in Washington. "The government is fully convinced additional measure have to be taken." He said Spain was "perfectly on track" to meet its budget deficit target of 6.5 percent of GDP this year and expected to meet a 5.8 percent target for 2014. After waves of unpopular tax hikes and spending cuts to cherished government programs such as national health care and public education, no further measures would be needed this year, he said.