Spain says must look for new growth areas

Unemployment is the biggest problem the Spanish government faces and it will need to look for new growth areas in order to combat it, Spanish Economy Secretary Jose Manuel Campa said on Wednesday. Spain enjoyed years of strong economic growth driven by a debt-fuelled property and construction boom, before the credit crunch brought these sectors to a halt and the economy sank into a deep recession.
"For the Spanish financial system as well as other aspects of the economy such as the public debt and unemployment the important thing is to look for a new growth path," Campa said at a financial conference in the Spanish capital. He said up to 4 percent of Spanish GDP must be invested in other sectors to promote growth following the collapse of the construction sector.
The government expects unemployment to rise to 19 percent this year after reaching 18.8 percent in the last quarter of 2009. Campa also said that it was essential that banks play their part in letting capital flow to businesses in order to stimulate the economy.