SPAIN Recovered 65% of Lost Competitiveness, Central Bank Says

Unit labor costs in the Spanish private sector have fallen by 7 percentage points since they peaked in 2009, the Madrid-based Bank of Spain said in its annual report today.

That’s two thirds of the competitiveness lost compared with the euro region average since the beginning of monetary union. Including public sector pay cuts, the economy has eliminated all the accumulated losses of competitiveness, according to the report.

Spanish Prime Minister Mariano Rajoy is counting on exports to haul the fourth-largest economy out of a sixth year of slump as the deepest budget cuts in the Iberian nation’s democratic history have undermined domestic demand amid a 27 unemployment rate.