The Spanish economy has now enjoyed almost four straight years of growth following a 0.9% increase in GDP in the second quarter and 3.1% in the last 12 months, according to the National Accounting figures published by the INE [National Statistics Institute].
This means the rate of growth has increased by one-tenth in both the annual and the quarterly rate, thus maintaining a favorable growth differential for Spain with the Eurozone average.
According to the Spanish government, growth is thus balanced, with an improvement in the contribution of domestic demand, while the foreign trade sector maintains a positive contribution for the fifth straight quarter. Employment is growing at an annual rate of 2.8%, three-tenths higher than in the first quarter, with the creation of 480,000 full-time equivalent jobs in the last year.
Following these results, the Spanish economy has recovered the level of income prior to the crisis; in other words, since the maximum figure posted in the second quarter of 2008. GDP is 1% higher than at the end of 2007, although it must still recover between 15 and 20% more, from when it stopped growing during the five years of recession suffered by the Spanish economy. The rate of 3.1% in the second quarter means this process has been speeded up and means that the forecast of 3% as an annual average will easily be achieved. Furthermore, Spain’s positive differential with the European Union and Eurozone averages is maintained, having posted growth of 2.3% and 2.2% respectively in the second quarter.
The composition of this growth remains balanced, with a slight improvement of one-tenth in the contribution from domestic demand, which has reached 2.4 percentage points. Growth in household consumption has remained steady at 2.5% over the last 12 months, while investment continues to be the most dynamic component, with growth of 3.4%, although this has slowed by half a point. Within the heading of investment, capital goods is the most active segment, with growth of 4.1% over the last year, 1.3 points less than in the first quarter. The growth rate of investment in construction has increased by one-tenth to 3% in the last year.
The contribution to economic growth from external demand remains steady at 0.7 points, thus posting five straight quarters in positive figures. Despite the strong growth of the Spanish economy, the foreign trade sector does not detract from this growth, in fact quite the opposite. This is an unprecedented event for the Spanish economy, which had not occurred in previous periods of growth, thus reflecting that the current model is sustainable and balanced. Both exports and imports have slowed their growth by around three points, although the sale of goods and services abroad are growing faster (4.5%) than imports (2.8%).
Practically all growth is translating into job creation, which has grown by 2.8% in the last 12 months. This rate is three-tenths faster than in the first quarter of the year. Job creation stands at 480,000 new full-time equivalent jobs in the last year. The number of hours actually worked continues to rise, by 1.7%, one-tenth less than in the previous quarter.