Spain's economy contracts again but could reverse trend

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Despite contracting for the eight consecutive quarter in the second quarter of 2013, Spain's economy was signaling that it could return to growth soon, analysts told CNBC.

Gross domestic product (GDP) contracted 0.1 percent in the second quarter from the first, according to preliminary data released by the country's national statistics agency on Tuesday.

The number was in line with economists' forecasts and marks eight quarters of contraction. In the first quarter the economy contracted by 0.5 percent.

The data follows slightly more positive unemployment numbers and bank earnings last week that suggested the beleaguered economy could be slowly recovering.

Virginie Maisonneuve, head of global and international equities at Schroders, told CNBC that the data were "very encouraging."

"Even if you exclude seasonal factors - because clearly Spain is a destination for a lot of tourists - if you look at exports you see some improvement," she said. "Although as we know it's still a very tough environment."

Jose Carlos Diez, chief economist at Spanish brokerage Intermoney, said the figures were a positive start but the economy had far to go.

"It's not a bad figure but it's not the beginning of the recuperation," he told CNBC Europe's "Squawk Box" on Tuesday: "We show a very good improvement in the exports, especially in the tourist area but [not] in domestic demand."

He said Spain would only recover further when growth returned to Europe and that only an improvement in exports and tourism could "stabilize domestic demand."

Spain's banks had a large part to play in the recovery, he said. "We have to improve the clean-up of the banking system. Credit is decreasing very, very fast and we have to stabilize credit to have a stable recovery in the future."