Deutsche Bank: Spain will grow next year, never mind deficit targets

MADRID | Deutsche Bank analysts said that Spain will grow again from 2013, even though the country will not meet the current deficit targets. Spain will this year miss the 5.3% set by Brussels and will not be until 2014, a year later than planned, when the imbalance will be reduced to 3% of GDP.

In a note published Tuesday and reported by El Economista, the bank’s experts explained that Spain has a liquidity problem, but is solvent. According to their calculations, if a bailout becomes necessary, it would suffice a rescue package of up to €390 billion from the G-20 non-European countries.

Analysts of the bank believe it is ‘perfectly feasible’ that Spain’s debt stabilises at around 85% of GDP, which would carry out the necessary fiscal adjustment without sacrificing economic growth. Deutsche Bank highlighted as strengths of the Spanish economy its robust performance in exports during the last three years, which in its opinion shows that, outside the construction sector, Spain Corp. is in good condition.

The German bank’s forecasts for 2012 are more optimistic than the government of Mariano Rajoy, as it expects the Spanish economy to fall by 1.2% this year instead of by 1.7%.

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