Bank of Spain optimistic over Spanish economy

08:14, June 01, 2010      

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The Bank of Spain (BOE) this Monday said it retained its confidence in the country’s economy despite recent negative news.

The bank's latest bulletin believes that the economy will improve in the near future. This comes just three days after ratings agency Fitch lowered Spain's credit rating from AAA to AA+, saying that the country would need a long time to climb out the current economic recession.

The bulletin also comes in the wake of the economic measures proposed by the Spanish government to combat the country's deficit. These measures, tremendously unpopular in Spain, include freezing pensions, reducing the salary of civil servants and ending grants for newly born children.

The bank views the government's package positively, calling it "important," but considers it "premature" to see what effect they will have on the economy.

Nevertheless, the bank believes the the economy is heading toward "an improvement," adding that the prospect of reducing the deficit to 3 percent of GDP by 2013 has been "substantially reinforced."

The bank also pointed out that the austerity measures will bring savings of 5 billion euros (6.2 billion U.S. dollars) in 2010 and 10 billion euros (12.3 billion U.S. dollars) in 2011.

Source: Xinhua


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