Arriba! Spanish GDP grew 2% in the year to Q4 2014, up 0.7% quarter on quarter.

By anyone else's standards that might seem a little on the modest side. But in the eurozone's current circumstances, that's excellent growth. Spain is the star performer of the big four euro economies.

Spain's growth rate now outstrips that of not only Germany, but the UK, where recovery has been much more obvious.

Spain's quarterly GDP growth, following a grim double-dip recession around the euro crisis. Instituto Nacional de Estadistica

Spain's growth is a contested issue: To critics of eurozone austerity policies, it's a dead cat bounce: A small recovery after a much deeper recession isn't anything to cheer about. Unemployment is above 23%, a Greece-like number. Spanish house prices fell by about a third after the financial crisis, leaving a huge chunk of the country with heavy mortgage debt and little to show for it.

But the country is the star pupil for fans of structural reform. It made significant labor-market reforms in 2012 to try to trim down its rigid employment laws, so it is touted as proof that hard (and painful) changes to inflexible economic systems pay dividends.

On the other hand, figures just out confirmed that Spanish prices fell 1.5% in December, making it one of the countries in Europe most affected by deflation. Retail sales are rising at the fastest pace in 11 years, and some of that boom in consumption might just be down to falling prices.

Here's Jonathan Loynes at Capital Economics on the figures (emphasis his):

The figures confirmed that Spain was one of the fastest growing eurozone economies last year and, with the exception of Ireland, ahead of the other “peripheral” economies. Portugal and Greece probably grew by around 1% in 2014 and Italy may have contracted.

Despite that stronger growth, Spain remains one of the weakest economies in terms of the levels of activity. GDP is still almost 6% below its 2008 peak, pointing to the existence of a very large amount of spare capacity in the economy.



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