Spain's economy grew at its fastest quarterly pace in over eight years in the second quarter, underpinning projections for strong growth in the rest of the year. As Sonia Legg reports the recovery comes as the country prepares for elections later this year.
This Ford production line is high tech - it's also an example of why Spain's economy is starting to recover. Economic output in the second quarter grew by 1 percent on the previous three months. And Spain enjoyed the fastest pace of quarterly growth in eight years. Kathleen Brooks is Research Director at City Index. SOUNDBITE: Kathleen Brooks, Research Director at City Index, saying (English): "What we have seen is that some companies are re-shoring - taking manufacturing out of China and re-shoring them in places like Spain and Portugal - and the economy really is a fantastic turnaround story," A record tourist season is also helping. Spain's centre-right government expects the economy to grow 3.3 percent in 2015 - faster than any other euro zone country. It's banking on it as elections loom but persuading voters the turnaround is trickling down to all may be hard. Five million people are out of work and while job creation is rising - many positions are badly paid and temporary. SOUNDBITE: Kathleen Brooks, Research Director at City Index, saying (English): "They have suffered for sure - there's been a lot of austerity - tax increases - things like that but they have continued to work and because there hasn't been social instability as a result of these changes I think that has really helped with corporate confidence and external investment." For once Germany's job numbers are going in the opposite direction. July saw its biggest increase in unemployment since May last year to just under 2.8 million - that's around 6.4 percent. Compare that with Spain's 22% rate and there's no contest. But there are other encouraging signs. Economic confidence across the euro zone has hit a four-year high - although Greece remains a potential banana skin.