Consumer spending on rise as Spain's economy grows by 1pc
The Spanish economy expanded by 1pc in the second quarter from the first, its fastest pace in more than eight years as consumer spending powered ahead, data showed yesterday.
That improved from a 0.9pc reading in the first quarter and could mark the high point of growth, according to some economists. The final data from statistics institute INE was in line with forecasts.
The conservative government, hopeful that the pick-up in the economy will be a decisive factor in this year's general election, expects full-year growth of 3.3pc.
Year on year, Spain grew 3.1pc in the second quarter, up from 2.7pc in the first and also meeting forecasts.
Spain exited a downturn in late 2013 following a six-year slump after a housing bubble burst, saddling banks and citizens with mountains of debt.
Driving growth is a recovery in consumer spending, up 1pc in the second quarter and accelerating from 0.7pc in the first, as unemployment edges lower.
Exports and imports grew strongly, increasing their rate of expansion from the first three months in quarterly terms. Exports were up 1.6pc and imports jumped 2.3pc. In annual terms, public spending rose 1pc in the second quarter after 0.2pc in the first. "(We see) an increased possibility that in the coming quarters we will see a moderate slowdown in the rate of growth," economists at BBVA said.
The International Monetary Fund said earlier this month that Spain must do more to whittle down unemployment of above 22pc and stimulate long-term growth.
Meanwhile, French business confidence reached a four-year high in August, but a much-awaited recovery in business investment remains elusive as the Eurozone's second-biggest economy struggles to gain momentum.
The official INSEE statistics agency said yesterday its business sentiment indicator edged up to 100 from 99 July, reaching a level not seen since August 2011. Its closely watched industrial morale index also rose, to 103 from 102 in July. (Reuters)