15 jun 2016
Economic outlook

Spanish economy: outlook june 2016

The Economic and European Affairs Department of CEOE analyzes the recent economic facts of the Spanish economy.


In Spain, following positive LFS results in the first quarter, the GDP figure was also favourable, with a quarterly growth of 0.8% for the third consecutive quarter and a year-on-year rate of 3.4% (previous figure was 3.5%). Moreover, growth on the demand side was more balanced. The net external demand had a less negative contribution to the GDP (-0.4 percentage points), while domestic demand slightly reduced its contribution to growth (3.8 percentage points), although it is still very robust.

One of the most relevant changes in Spain’s activity at the beginning of the year is the deceleration in the construction sector, noticeable both, in investment and in activity. In sharp contrast, it is worth noting the dynamism in activity and employment in certain services such as "Trade, transport, accommodation and food service activities" (closely related to tourism), "Information and Communication" and "Professional Activities". On the demand side, the strength of consumption, both private and public, stands out in the first quarter.

CEOE’s activity indicator, with partial information for the second quarter, estimates quarterly GDP growth for the period at 0.7%, one tenth lower than the economy’s 0.8% rate of growth in the first quarter. 

This scenario will positively influence the labour market, although job creation will be somewhat lower than in 2015. The number of people employed could increase at a rate of 2.7% this year and 2.1% in 2017.

Inflation under control, a moderate growth of wage and salary costs and the recovery cycle underway together with the impact of the reforms undertaken have enabled Spain to advance positions in the 2016 IMD World Competitiveness Ranking.


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