(MENAFN- AFP) Spain boasted it was surging ahead of its eurozone neighbours as it raised its economic growth forecasts on Friday, promising hundreds of thousands of new jobs after years of recession.
The government forecast that Spain's economy -- the fourth biggest in the eurozone -- would grow 1.3 percent in 2014, bouncing back after six years of crisis that brought it close to financial collapse.
The recovery will then accelerate in 2015 with two percent growth, according to the new forecasts published by the finance ministry.
"These are the figures of a country that is growing more than the eurozone and is setting an example internationally by the reforms we have carried out," said Deputy Prime Minister Soraya Saenz de Santamaria.
Spain's financial troubles sparked fears for the stability of the whole eurozone in 2012, when it was forced to borrow 41 billion euros ($52 billion) to rescue its banks.
Now "we have stopped being a problem," Saenz told a news conference on Friday.
The crisis stemmed from the collapse of a building boom in 2008 that plunged Spain into a double recession and threw millions out of work.
To stabilise its public finances and strengthen the economy, the conservative government imposed tough budget cuts and labour reforms that sparked mass street protests.
"Thanks to the reforms undertaken, the Spanish economy managed to grow by 0.6 percent in the second quarter of 2014," the ministry said.
That was "higher than the average for the members of the eurozone, which was weighed down by its biggest members", it said.
Growth in France has stagnated and Italy has slipped back into recession. Even Germany, which has performed better than most eurozone country's during the eurozone debt crisis, saw its economy contract by 0.2 percent in the second quarter.
- Long jobless queue shortens -
Friday's forecasts, published along with Spain's 2015 budget, surpassed earlier estimates of 1.2 percent growth for this year and 1.8 percent for 2015.
The ministry also said it expected the country to create 622,000 jobs in 2014 and 2015, after six years of job destruction.
Two recessions in five years have thrown many families in Spain into poverty, swelling the queues at job centres and soup kitchens and driving thousands of Spaniards to emigrate in search of work.
The 1.3 percent growth forecast for this year marks a turnaround after the 1.2 percent contraction recorded in 2013.
"For the first time practically since the start of the crisis, Spain is growing faster than the eurozone," Finance Minister Luis de Guindos said.
"That is due basically to strengthening of domestic demand and an improvement in credit flows," he said at the news conference after a cabinet meeting that approved the budget.
"Household consumption is growing... due to a recovery of confidence, a recovery in jobs and an improvement in inflation," he said.
Consumer prices have fallen in Spain as elsewhere in the eurozone, to the point that economists have warned of the risk of a damaging deflationary spiral.
The government said it expected Spain's unemployment rate to ease to 22.2 percent by the end of 2015.
Currently at 24.47 percent, Spain's unemployment rate is the second highest in the eurozone after bailed-out Greece.
Nevertheless, the government hailed it as a good sign when the jobless rate dipped under the 25-percent mark in the second quarter of this year.
During that period, Spain's economy grew by 0.6 percent while the eurozone economy stagnated with zero growth, according to the official EU data agency Eurostat.
That was also higher than the slight expansion of 0.2 percent for the full 28-country European Union.
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