Spanish Economy Minister Luis de Guindos attends a speech by Prime Minister Mariano Rajoy
Spanish Economy Minister Luis de Guindos attends a speech by Prime Minister Mariano RajoyReuters

Spain's gross domestic product (GDP) grew at its fastest rate in six years, notching up 0.4% growth in the first quarter, the central bank said on Thursday.

The fourth-biggest economy in the Eurozone returned to sluggish growth in the third quarter of last year, but this quarter's growth marks the fastest increase since the first quarter in 2008 when the financial crisis helped burst Spain's property bubble.

"In the first quarter of 2014, the Spanish economy continued on a path of gradual recovery in the context of increasing normalisation on the financial markets and a gradual consolidation of the labour market," the central bank said.

Meanwhile, the bank predicted Spain's economy will grow by 1.2% this year and 1.7% in 2015, confirming an earlier forecast.

The bank's calculations are based on preliminary data and are subject to revision at a later date.

While Spain returned to growth in the second half of 2013, unemployment remains stubbornly high around 25%, while youth unemployment has stuck around the 50% mark.

Indeed, in a recent survey on regional unemployment, Spain's Andalusia came top with a rate of 36% while the top 5 regions within Europe were all located in Spain. According to the Eurostat survey, every region in Spain has higher unemployment than the European Union average of 10.8%.

Spain narrowly avoided a bailout in 2012 and investors have since been emboldened after the European Central Bank vowed to back ailing Eurozone economies later that year.

Spain's Economy Minister Luis de Guindos said he expected GDP to grow by an average of 1.5 percent in 2014 and 2015. "The goal is to achieve two years in a row of growth, with net job creation, and that will be the exit door from the Spanish crisis," De Guindos said.

However, jobs growth will be "clearly insufficient", he said.

"A country with an unemployment rate of 26 percent is starting at a terrifying level," de Guindos said.

Spain will publish its unemployment data for the first quarter next week.