Spain's Prime Minister has defended his handling of the country's troubled economy, saying he's expecting growth to reach 2.4% in 2015. His announcement comes amid an uncertain political landscape and fears Spain may be heading down the same political path as Greece, Katie Gregory has more.
There's an election on the horizon and upstart parties sprouting out of discontent. For a Spanish government lacking in voter support, some positive economic news couldn't come at a better time. Prime Minister Mariano Rajoy confirming Spain is on the path to recovery. He expects the economy to grow by 2.4% in 2015, raising the government's official forecast of 2%. (SOUNDBITE) (Spanish) SPANISH PRIME MINISTER MARIANO RAJOY, SAYING: "We were sinking and we are now growing and we will continue to do so. It has cost us two years to recover. In the third year we have seen the first signs of growth and job creation. There are other signs of progress maybe a little bit more difficult to measure such as investor, business and consumer confidence." But the effects aren't being felt in the unemployment queues yet... around one in four Spaniards are still without a job. The Prime Minister's annual State of the Nation speech was aiming to win back weary voters, disheartened by the government's handling of the six year crisis. But many are now favouring new anti-establishment, anti-austerity parties... similar to the Syriza Party in Greece. And political instability could be all it takes to unsettle the recovery, says Joe Rundle from ETX Capital. (SOUNDBITE) (English) ETX CAPITAL, HEAD TRADER, JOE RUNDLE, SAYING; "There's a real worry that the left anti-euro parties will really gather steam and push Spain into a similar situation that we're seeing in Greece. The Spanish economy is doing ok now, although it's not back to pre-crisis levels but it is on the right path - but it is very risky to derail it and it could be derailed quite quickly." The Spanish Prime Minister and his 'People's Party' are hoping a stronger economy will be their election trump card. But they may have to play their whole hand first to win back public support.