Spain GDP expands 0.5% in Q3, but risks lie ahead
Spanish gross domestic product (GDP) growth slowed down during the third quarter in line with what the market expected, but analysts raised concerns about how the recovery will fare next year.
Spanish GDP expanded by 0.5% during the July-September period, easing from the 0.6% growth seen in the second quarter.
Nevertheless, the economy was 1.6% larger than it was during the third quarter of 2013, a pick-up from the 1.3% annual growth registered in the second quarter.
While no details were given regarding the components of growth, analysts predicted that household consumption was the main contributor, which has been strengthening as a result of a better labour market and low inflation.
As economist Victor Echevarria from BNP Paribas explained, Spanish annual GDP growth "has been picking up […] since the economy came out of recession in the second half of 2013".
Echevarria said he expects the economy to continue to grow in the coming quarters but said he sees "scope for disappointment in 2015".
"Slow growth in the Eurozone will have an impact on Spain via slower export growth, a slowdown in job creation and worsening sentiment. As a result, we expect the economy to grow by just 1.6% in 2015, below the consensus forecast of 2%."
He also highlighted an expected increase in political uncertainty weighing on the economy ahead of the November 2015 Spanish general election.
"In particular, the decline in support for the main political parties and the sharp rise in support for the anti-establishment Podemos party are changing the political landscape and could make forming a government after the election more difficult," Echevarria said.