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Spain Confirms Q3 GDP Growth

James Boston
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Spain Confirms Q3 GDP Growth

Spain’s National Institute of Statistics has just reconfirmed the relatively strong economic growth experienced in the third with the publication of the country’s Final Q3 GDP figures. There was no change announced from the Preliminary estimate of 0.5% growth on the quarter published at the end of last month, nor was there any alteration of the annualised number which remains at 1.6%. Although these final figures are slightly softer than in the second quarter, 0.5% as compared to 0.6%, today’s announcement represents the fifth consecutive quarter of growth in the economy, Spain has only posted positive GDP figures since emerging from recession just over a year ago. The numbers were bolstered by a pick up in consumer demand that helped to offset the persistent negative contribution from international trade.

The consensus forecast for the final quarter’s GDP growth rate in Spain is currently just above 0.7%, if this holds then the full 2014 expansion rate of the Eurozone’s fourth largest economy would stand around 2.4%. Although there is plenty of fundamental evidence that the Spanish economy is on the rebound, it is difficult to see how the fourth quarter can be materially stronger than the third when viewed in the context of the deterioration in the overall Eurozone economy. Spain’s labour market reforms and the introduction pro enterprise measures during the past two years will offer a degree of insulation however consumer demand will need to continue to pick up substantially in order to make up for dwindling export led growth.

Preliminary inflation data for the month of November is already pointing to a decline in consumer prices. Lower energy costs will obviously be a factor in these readings but the beyond that they point to slowing in consumer activity. Despite this the Spanish Business Confidence measurement is continuing to pick up, according to the latest reading this morning this number remains negative at -5.9 but has now posted an improvement for the third month in a row.

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