Spain's economy exited a two-year recession, with gross domestic product growing 0.1 percent in the third quarter from the second, the Bank of Spain said on Wednesday (October 23), marking the economy's first expansion in nine quarters.

Spain's economy has shrunk or has been stagnant every year since 2008, when a property market collapse left millions out of work, forced a deep financial sector overhaul and drove thousands of companies into bankruptcy.

One of the euro zone's highest public deficits, nervous debt markets and a paralysed construction sector has since then forced the government to pass tough austerity measures and structural reforms in an effort to clean up the country's finances and nurse it back to economic health.

Spanish Prime Minister Mariano Rajoy welcomed the news but cautioned that recovery would be 'slow and gradual'.

Austerity measures and reforms, which pushed the country close to requesting sovereign aid last year, are now starting to bear fruit, at least for many businesses with a presence abroad.

The central bank said exports contributed 0.4 percentage points to third quarter growth while internal demand had a negative impact of 0.3 points.

Spain's economy has shrunk by 7.5 percent since the beginning of 2008. But over the same period, the export sector has grown by 14.6 percent and is now worth over a third of total output compared to around a fifth five years ago.

The country's stubbornly high jobless rate may also have peaked. Third quarter unemployment data is due on Thursday (October 24) , with analysts polled expecting the rate to have fallen to 26.1 percent from 26.3 percent at the end of June.

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