Spain Q2 GDP Growth Weakest in 3 Years

Spain’s economy advanced 0.4 percent on quarter in the three months to June 2019, below a preliminary estimate and market expectations of 0.5 percent and following a 0.5 percent expansion in the previous period. It was the weakest growth rate since the second quarter of 2016, as government spending slowed, fixed investment shrank and household consumption stalled. Net trade contributed positively to growth.

Fixed investment contracted 0.2 percent, after expanding 1.4 percent in the first three months of the year, mainly due to investment in tangible fixed assets (-0.4 percent from 1.8 percent), of which machinery, equipment, weapon system and biological resources (-1.7 percent from 3.4 percent) and housing, other buildings and constructions (0.5 percent from 0.6 percent). Meanwhile, investment in intellectual property products rose 0.9 percent, rebounding from a 0.1 percent fall in Q1. Government spending went up 0.4 percent, easing from a 0.5 percent growth in the previous period while household consumpution stalled, after expanding 0.2 percent in the first quarter of 2019.

Exports increased 1.7 percent (vs 0.6 percent in Q1) and imports rose at a softer 0.9 percent (vs 0.1 percent in Q1).

On the production side, services activities advanced 0.5 percent, slowing from a 0.8 percent gain in Q1, mostly due to information & communication (-0.4 percent from 0.2 percent); trade, transport & hotels (0.2 percent from 1 percent); real estate (0.4 percent from 0.5 percent); and professional, scientific and tecnical activities (0.8 percent vs 1 percent). Also, contruction output rose 0.8 percent, easing from a 1.6 percent increase. On the other hand, industrial output grew 0.5 percent, following a 0.3 percent expansion and the primary sector shrank 2.7 percent, less than a 4.1 percent contraction in the prior period. 

On an annual basis, the GDP expanded 2 percent, following a downwardly revised 2.2 percent growth in the previous quarter and down from a flash estimate and market forecasts of a 2.3 percent gain. 

Spain Q2 GDP Growth Weakest in 3 Years

INE | Stefanie Moya |
9/30/2019 7:50:12 AM