(Corrects date of euro’s introduction in second paragraph. See TOP CRIS for more on Europe’s financial crisis.)
Spain posted its second current- account surplus since the start of the euro in August, while foreign stock and bond investors increased their holdings in the nation for the first time in more than a year.
The current account showed a surplus of 1.24 billion euros ($1.6 billion) in August, compared with 500 million euros in July, the first positive reading since the euro was introduced in 1999, the Bank of Spain said today. Foreign portfolio investment showed an inflow of 2.34 billion euros in August, the first positive reading since February 2011.
Spain, which ran up the world’s second-biggest current- account deficit during the housing-fueled boom, is now relying on exports to drag the economy out of a five-year slump as an unemployment rate of 25 percent weakens domestic demand. As the government seeks to reduce the nation’s dependence on foreign financing, it is implementing measures such as cuts to labor costs to make Spanish goods more competitive abroad, while raising taxes on consumption.
To contact the reporter on this story: Emma Ross-Thomas in Madrid at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at email@example.com