- Exports bounce back
- Economy stabilizes
- as well as sovereign debt prospects
At the cost of a considerable amount of effort, Spain is starting to raise its head again. Economic activity increased in the third quarter, by a modest amount but for the first time in more than two years. Consumer spending and business investment showed signs of stabilisation. Exports remained brisk, rising by around 40% in terms of volume since 2009 - a record for the euro zone - and are currently well above the pre-crisis level. 
The country is therefore seeing the initial benefits of its resolutely supply-focussed policy. Unit production costs have fallen, foreign direct investment has flooded in, and companies have seen spectacular improvement in profitability (chart). The margins generated should allow for the upturn in equipment purchases to be largely self-financed, as long as risk aversion decreases. Standard & Poor’s could contribute to this. On 29 November, the agency upgraded the outlook attached the country’s debt, rated BBB-, from “negative” to “stable”. This was a good decision.
BY Jean-Luc PROUTAT