Spain: Second release revises Q4 growth slightly down
March 29, 2019
A second GDP estimate, released by the National Statistical Institute (INE) on 29 March, puts growth a notch below the first calculation. The economy grew a seasonally-adjusted 0.6% from the previous quarter in Q4 (previously reported: +0.7% quarter-on-quarter s.a.), marginally up from the 0.5% expansion recorded in the third quarter (previously reported: +0.6% qoq s.a.) of the year and remaining remarkably resilient in comparison to the Eurozone average. In year-on-year terms, growth was recorded at 2.3%, slightly below Q3’s 2.5% outturn. For the year, meanwhile, growth came in at 2.5%, decelerating from the 3.0% expansion logged in 2017.
Both domestic and external demand drove the overall expansion in Q4. Private consumption was revised down to 0.4% in quarter-on-quarter terms (previously reported: +0.5% qoq), easing from Q3’s 0.6%. Meanwhile, government spending was also downwardly revised to 0.4% (previously reported: +1.2% qoq), putting it below Q3’s 0.8% outturn. Lastly, fixed investment declined 0.2% quarter-on-quarter from a revised 0.2% rise in Q3 (previously reported: +0.8% qoq), largely reflecting a marked contraction of investment in machinery and equipment.
Meanwhile, external sector metrics fell in the second release. Exports of goods and services rose 0.7% from the previous quarter (previously reported: +1.9% qoq), rebounding from the 0.8% dip recorded in Q3 (previously reported: -0.9% qoq). On the other hand, import growth was flat in Q4 (previously reported: 1.1% qoq), recovering from the 0.9% drop in Q3 (previously reported: -0.2% qoq). Nevertheless, the net contribution of the external sector to growth was still positive.
Looking ahead, growth is expected to wane further this year, in line with the slowdown that began back in 2016. Weaker employment gains are seen weighing on private consumption, while tightening financial conditions could drag on capital spending growth. In addition, the vital tourism industry—which has been the country’s main source of growth and jobs during the post-crisis period—is losing steam, posing a major downside risk to the outlook.
Author: Nicolás J. Aguilar, Economist