Spain’s trade deficit shrank by nearly 70 percent year on year in the first half of 2013, as demand from emerging markets boosted exports while recession-hit domestic consumers bought fewer foreign goods.

The deficit narrowed to 5.8 billion euros ($7.7 billion), a third of what it was in the same period in 2012, the Economy Ministry said.

Exports rose 8 percent to 119 billion euros, which the ministry said was the highest ever figure in absolute terms.

The encouraging data, combined with the best tourism season in years, fanned hopes the economy may exit recession in the third quarter.

Spain’s gross domestic product dropped just 0.1 percent April and June, while the euro zone as a whole emerged from 18 months of economic contraction.

The government argues the economy has bottomed out and will grow and create jobs again soon. Spanish unemployment stands at over 26 percent.

But analysts are more cautious, with many predicting a period of stagnation.

In June alone, the trade deficit was 107 million euros, down from 2.7 billion the same month last year. Exports to Asia and Africa grew strongly while demand from other parts of Europe grew too, the ministry said. (Reuters)