euro area gdp grew by 0. 9 %, compared with a decline of 0. 4 % in 2013. driving this recovery has been the increase in private consumption, in a setting of improved household confidence and income. other favourable factors have been the contribution of exports and gross fixed capital formation, the latter due to the pick - up in construction. the data available on the spanish economy suggest that, during the first quarter of 2015, the expansionary trajectory observed in 2014 has stepped up. gdp is estimated to have increased by 0. 8 % in quarter - on - quarter terms, which would place the year - on - year rate of change for the first quarter at 2. 5 %, a higher level than expected. the recovery in the spanish economy this year and in 2016 will be underpinned by the strength of private domestic demand and by stronger exports. moreover, the decline in the tax burden, following the reform that came into force in january, and the monetary policy measures recently adopted by the ecb – including most notably the asset purchase programmes – will also support growth. the projections published by the banco de espana bis central bankers ’ speeches in its economic bulletin two weeks ago point to gdp growth of 2. 8 % this year, followed by similar growth in 2016, at a rate of 2. 7 %. as to the labour market, the projections of the banco de espana are for growth in employment of 2. 7 % this year and 2. 6 % in 2016. the increase in employment will enable the unemployment rate to continue shrinking at an even greater pace than in 2014, to stand at around 20 % of the labour force in the fourth quarter of 2016. these projections, which do not appear to be overly optimistic given the figures – published on monday – for the decline in unemployment and the rise in social security registrations in march, highlight the need to continue pursuing policies geared to boosting competitiveness, investment and exports, the only foundations suitable for sustainable job creation. price developments in 2015 and 2016 will be greatly influenced by oil prices. consumer prices might fall by 0. 2 % on average in 2015, and rise by slightly more than 1 % in 2016. stripping out the energy component, consumer prices are expected to rise modestly, in line with the scenario of growing household expenditure, the lessening of surplus capacity in the economy and the depreciation of the euro. the risk of deflation appears to have been clearly averted in the monetary union and, consequently, in

luis m linde : economic recovery in spain opening remarks by mr luis m linde, governor of the bank of spain, at the xxii meeting of the financial sector, organised by abc, deloitte and sociedad de tasacion, madrid, 8 april 2015. * * * let me first thank bieito rubido, the editor of abc, yolanda gomez, the deputy editor, fernando ruiz, the chairman of deloitte and juan fernandez - aceytuno, the general manager of sociedad de tasacion, for their invitation to the opening of this encuentro del sector financiero forum. in my address i shall briefly set out the situation of and outlook for the spanish economy in the european setting ; i shall review monetary policy developments in the euro area ; and i shall conclude with some thoughts on the connection between political tensions and the functioning of the monetary union which, today, as a legacy of the crisis dating back to 2007, are evident and significant. the spanish economy i shall begin with the situation of the spanish economy. recent figures confirm the momentum and strength of our economic recovery, against a background in which the correction of the macroeconomic imbalances and the improvement in the external environment continue. the policies deployed at home and in europe are underpinning this sound performance. but there are other factors contributing to the recovery : the fall in oil prices, which is translating into a boost to household incomes and into a reduction in firms ’ production costs ; the very significant depreciation of the euro ; and the favourable economic activity figures of some of our trading partners within the monetary union. turning to prices, the annual rate of inflation has been negative in the first three months of 2015, running at – 1. 3 %, – 1. 1 % and – 0. 7 %, respectively, although the non - energy cpi and the core inflation index have been more stable, posting positive figures. in particular, in march, on preliminary figures, the annual rate – though still negative – is estimated to have stood at – 0. 7 %, an increase of 0. 4 pp on february, which largely stemmed from the correction in oil prices. following several quarters of sluggish growth, a recovery is discernible in the euro area. most member countries are posting positive gdp growth rates, although there are significant differences. among the major economies, the pace of economic activity is highest in spain and germany. in 2014,