Spanish recession slowed in the second quarter of 2013, thanks to the improvement in the external sector.
Gross domestic product declined 0.1 percent quarter-on-quarter in the three months to June, slower than a 0.5 percent fall seen in the first quarter, preliminary estimates from the Bank of Spain showed on Tuesday.
On an annual basis, the economy contracted 1.8 percent in the June quarter, following a 2 percent decline a quarter ago.
Buoyant exports of goods and services had a positive impact on the GDP in the second quarter, the report noted. The bank also noted a slower decline in domestic demand during last quarter than in the preceding three-month period.
Suggestions that Spain is on the cusp of an economic recovery are far too optimistic, Ben May at Capital Economics said. The economist expects the economy to contract by about 1.7 percent this year.
The International Monetary Fund projects 1.6 percent contraction this year for Spain, before possible stagnation in 2014. While there are signs that the recession may end soon, the lender said the country's outlook remains difficult.
Spain has one of the highest unemployment rates in the euro area. But, recent figures showed that registered unemployment logged the biggest decline for the month of May. Stringent austerity and sharp economic downturn were the major factors that forced companies to shed jobs across Europe.
The IMF has called for urgent reforms to generate jobs growth and jobs as the outlook remains tough.
Official data on Monday showed that Spain's government debt to GDP increased to 88.2 percent in the first quarter from 84.2 percent in the previous quarter.
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