MADRID: Spain’s robust three-year economic recovery picked up momentum in the second quarter, notching up its best growth performance since 2014. GDP in the eurozone’s fourth largest economy expanded by 0.9 per cent in the three months to June, up from 0.8 per cent at the start of the year, according to official figures.
Spain has proven to be one of the eurozone’s poster children since its banking system was bought back from the brink with an EU bailout in 2012. The country’s centre-right government has managed to cut wages, boost exports, and bring down its budget deficit in line with Brussels’ fiscal rules.
Unemployment – the second highest in the eurozone – has also made steady strides, falling to its lowest since 2009 this month. Year on year growth also edged up to 3.1 per cent to from 3 per cent in the quarter, marking Spain’s 11th successive quarter of growth.
“The better-than-expected performance in the first half of 2017 appears to be underpinned by continued strong employment growth, while exports continue to surprise on the upside in line with better demand conditions across key markets in the eurozone and a more competitive currency”, said Raj Badiani, economist at IHS Markit.
Madrid is also on course to finally exit the EU’s “excessive deficit procedure” for member states in breach of budgetary rules next year. Spain’s deficit is forecast to shrink from 3.1 per cent this year to under Brussels’ 3 per cent ceiling in 2018.