The outflow from securities such as bonds and equities accelerated from 24.1 billion euros in the first 11 months of 2010, the Bank of Spain said in an e-mailed statement today. Spain’s current account deficit narrowed to 36.2 billion euros in the period from 45.8 billion euros a year earlier, the central bank said.
The People’s Party government, in power following a general election on Nov. 20, is trying to convince foreign investors it can fix public finances and kick-start the shrinking economy. Spain’s 10-year borrowing costs have fallen to 5 percent from more than 6 percent at the end of November, helped by three-year loans the European Central Bank began offering banks last month.
Economy Minister Luis de Guindos said on Jan. 25 that “real foreign money” is starting to flow into the country as investors buy government bonds. The yield on Spain’s 10-year benchmark bond was 5 percent today, compared with 5.04 percent yesterday and 6.63 percent on Nov. 30. The Ibex 35 main share index, which declined 13 percent last year, is unchanged so far this year.
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