MADRID: Spain's economy is pursuing a decade-long economic expansion, fuelled by healthy domestic consumption and rising capital investment, which has helped bring unemployment to a near 30-year low. The government on Friday raised its forecast for economic growth this year to 3.8 per cent from 3.4 per cent but kept its 2008 projection unchanged at 3.3 per cent.

The upward revision for 2007 is due to a more moderate slowdown in domestic consumption and the construction sector than previously expected, while stronger global growth prospects were boosting exports, the economy ministry said in a statement.

With economic activity flourishing, Spain created a net 300,000 jobs in the second quarter, taking unemployment to 7.95 per cent of the workforce, a level last seen in the fourth quarter of 1978, the national statistics institute INE said.—AFP