Span­ish con­sumers pro­pel fastest eco­nomic growth

The Pak Banker - - BUSINESS -

Span­ish con­sumers helped push the pace of growth to the fastest in eight years in the sec­ond quar­ter, as do­mes­tic de­mand re­in­forced its po­si­tion as the main driver of the re­cov­ery.

House­hold con­sump­tion rose 1 per­cent on the quar­ter and main­tained the pace of ex­pan­sion at 3.5 per­cent on an an­nual ba­sis, the Na­tional Sta­tis­tics In­sti­tute said Thurs­day. Im­ports in­creased 2.3 per­cent in the three months to June, while ex­ports were 1.6 per­cent higher.

Over­all, gross do­mes­tic prod­uct ex­panded 1 per­cent in the sec­ond quar­ter and 3.1 per­cent from the same pe­riod a year ear­lier, con­firm­ing a July 30 es­ti­mate and match­ing a Bloomberg News sur­vey. The Span­ish econ­omy has now added eight con­sec­u­tive quar­ters of growth.

Ini­tially led by ex­ports, the re­cov­ery is now gain­ing mo­men­tum as em­ploy­ment rises and lower energy prices boost Spa­niards' dis­pos­able in­come. Con­sumer con­fi­dence rose to a record in July and Econ­omy Min­is­ter Luis de Guin­dos has said the econ­omy may main­tain its pace of growth this quar­ter.

Ear­lier this week, the gov­ern­ment re­it­er­ated its growth tar­get of 3.3 per­cent for this year, twice the av­er­age for the euro area. De­spite the pickup in growth, or­ga­ni­za­tions such as the In­ter­na­tional Mon­e­tary Fund re­peat­edly have warned struc­tural im­bal­ances re­main un­solved, in­clud­ing "very high" un­em­ploy­ment, low pro­duc­tiv­ity and high lev­els of debt.

Job­less­ness stands at about 22 per­cent, sec­ond only to Greece in the Euro­pean Union, and the na­tion's debt is ap­proach­ing 100 per­cent of gross do­mes­tic prod­uct.

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