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Spain, the euro-zone’s fourth largest economy, might begin moving away from the never-ending deterioration. No, the country hit by a shocking  unemployment rate of 27.2% is not returning to growth so fast, but there might be some “green shoots”.

Here are three positive signs:

  1. Stronger PMIs: the manufacturing purchasing managers’ index for May unexpectedly rose from 44.7 to 48.1 points, much better than 45.5 expected. This is still within contraction territory (a score of under 50 points), but the 48 level already represents slow contraction.
  2. Stronger tourism: Tourists have spent 7.5% more in the first 4 months of 2013 in comparison to 2012. The feeling in Barcelona is that there are more tourists now than beforehand.
  3. A drop in unemployment?: Spanish Prime Minister Mariano Rajoy stated that “the worst is over”, which is not a new nor a surprising statement from a politician. However, he also released a thick hint about a drop in unemployment “I’m not counting chickens here, however I recommend that you pay attention to unemployment and social security numbers on Tuesday.  If the patterns we’ve seen are confirmed they will be clearly encouraging”

Since the bust of the housing bubble, Spain has suffered a great deal, with an endless drop in house prices and employment. The raise of the VAT in September 2012 also hit retail sales quite badly. Spain hasn’t seen growth since 2011.

Yet perhaps Spain cannot dig any deeper? The employment figures and services PMI are the next important events.

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