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Inter-American Development Bank hails Spain's turnaround

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(Globalpost/GlobalPost)

Sao Paulo, Apr 23 (EFE).- Spain has achieved the "unprecedented" feat of boosting exports and turning a current account deficit into a surplus without a currency devaluation, the Inter-American Development Bank's chief economist said here Tuesday.

Speaking at an event in Sao Paulo organized by the Spanish Business Council for Competitiveness, or CEC, the IDB's Jose Juan Ruiz said Spain could end 2013 with a current account surplus equal to 1 percent of gross domestic product.

He pointed out that prior to the global financial meltdown, Spain had the world's second-largest current account deficit in absolute terms and the biggest in relation to the size of its economy, reaching 10 percent of GDP in 2007.

While the strong growth in exports since 2008 is "the leading indicator" of improved economic conditions, it is not the only positive development, Ruiz said, adding, "Many things are happening in Spain."

The country's improved external position is due mainly to a "very strong increase in productivity," according to Ruiz, a former director of strategy and chief economist for Grupo Santander, Spain's largest financial institution.

He said the time to invest in Spain is "now," predicting that within five years, the Iberian nation will again be one of Europe's most dynamic economies.

Noting the apparent disconnect between a comparatively modest 5 percent drop in Spanish GDP since the beginning of the crisis and the country's skyrocketing unemployment rate, currently 27.1 percent, Ruiz explained the anomaly in terms of the economy's pre-meltdown dependence on the real estate and construction sector.

That sector, he said, accounts for half the jobs lost in Spain since 2007.

The focus of the CEC event in Sao Paulo, which also included Telefonica S.A. executive Eduardo Navarro, was presenting the report "Spain: A Land of Opportunities."

The CEC, comprising more than a dozen of Spain's leading companies, is mounting a 23-city international road show to disseminate the report.

http://www.globalpost.com/dispatch/news/agencia-efe/130423/inter-american-development-bank-hails-spains-turnaround