Spain continued to show signs of a recovery as output grew in the last three months of 2013 -- in spite of a sharp increase of the number of people working in the country's "black economy".
The country's gross domestic product (GDP) grew by 0.3 percent in the fourth quarter, in line with forecasts and an improvement on the 0.1 percent growth in the previous three months, according to preliminary data from the country's statistics agency Thursday.
Commenting on the data, Pedro De Noronha, managing partner of hedge fund firm Noster Capital, said the figures were "better than a poke in the eye."
"It increases sentiment into the periphery of Europe…I think Spain is little bit ahead of itself and I think the market was a little bit too quick pricing in the improvement but maybe the green shoots are for real," he told CNBC Europe's "Squawk Box" on Thursday. "We might well be at the first innings of a Spanish and peripheral recovery."
(Read more: Spain emerges from 2-year recession)
Spain's latest economic growth comes after a protracted recession which it finally exited in the third quarter of 2013. It has also seen strong growth in its manufacturing and services sectors with all-sector growth in Spain hitting at 77-month high in December.
The fourth largest economy in the euro zone still has one of the highest unemployment rates in the euro zone, however, with 57.7 percent of young people in the country without jobs.
As struggling families in Spain try to scrape a living many have turned to the "black economy" and undeclared work has become the norm, a study published on Thursday showed, with untaxed transactions surging to equal nearly a quarter of the country's output.
Cash transactions carried out behind the taxman's back in 2012 hit nearly 253 billion euros, or 24.6 percent of GDP, according to a report released by Spanish tax office workers union Gestha showed on Thursday.
(Read more: Europe's black market economy is booming)
At the start of the crisis, the black economy stood at 17.8 percent of GDP, the report noted.
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt.