Spain GDP Q4 2016


Growth remains robust in Q4

Spain’s economy continued to show steady momentum in Q4 as the country is firmly entrenched on a growth path following years of recession. According to more complete data released by the National Statistics Office (INE) on 25 February, GDP expanded a seasonally-adjusted 0.8% in Q4 over the previous quarter, which matched the result reported in the 29 January advance estimate. The result matched Q3’s increase and is a solid performance for the Spanish economy.

Spain’s recovery has been driven by robust domestic demand, although the domestic economy did moderate slightly in Q4. Private consumption, which expanded at the fastest pace since Q4 2007 in Q3, grew 0.8% in Q4 (Q3: +1.1% quarter-on-quarter). Private consumption has picked up notably in recent quarters, thanks largely to rising employment, falling prices and renewed confidence. The unemployment rate dropped to 20.9% in Q4, which marked an over-four-year low. Government consumption, which was broadly stable in the fourth quarter, increasing 0.4% (Q3: +0.5% qoq), was supported by a less tight fiscal position after years of austerity. Fixed investment edged down, expanding 1.1% in Q4, which was below Q3’s 1.3% increase.

The external sector improved in the fourth quarter, however, largely on the back of subdued imports. The net contribution to overall growth swung to plus 0.9 percentage points from the minus 1.0 percentage point tallied in Q3. Imports slowed notably, from the 3.1% expansion tallied in Q3 to a 0.3% increase in Q4, which marked a one-year low. The low oil price environment has reduced energy imports and contributed to the improved external balance. Exports also lost steam, expanding 0.9% in Q4 (Q3: +1.8% qoq).

On an annual basis, GDP rose 3.5%, which matched the preliminary estimate and marked the strongest growth since Q4 2007 (Q2: +3.2% year-on-year). The economy’s strong growth figures throughout this year have led Spain to emerge as one of the fastest-growing economies in the Eurozone. For the full year 2015, the economy grew 3.2%, which was above 2014’s 1.4% and marked the largest expansion since 2007.

FocusEconomics Consensus Forecast panelists expect GDP to expand 2.7% in 2016, which is unchanged from last month’s forecast. In 2017, panelists expect the economy to increase 2.3%.

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Spain GDP Chart

Spain GDP Q4 2015 1

Note: Quarter-on-quarter changes of seasonally-adjusted GDP and year-on-year variation in %
Source: Statistical Institute (INE) and FocusEconomics calculations.

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