Spain Q2 GDP slows amid political limbo

MADRID: Spain’s economic growth slowed slightly in the second quarter, official data showed on Friday, as the country remains mired in political limbo after two inconclusive general elections.

The Ine statistics agency said that GDP (gross domestic products) expanded by 0.7 percent compared to a 0.8 percent rise in the previous three months.

However, compared to the same period in 2015, the economy rose 3.2 percent from April to June, it added.

Overall, acting Economy Minister Luis de Guindos has said he hopes the economy will grow 2.9 percent in 2016, and the government is due to unveil an updated economic forecast later Friday.

Spain has been without a fully functioning government for more than seven months.

The blockage started after elections on December 20 failed to give any party an absolute parliamentary majority, as upstart groupings Ciudadanos and Podemos shook up Spain’s long- estab- lished two-party system.

Efforts to forge a coalition were unsuccessful as rival parties were unable to overcome their differences, prompting repeat elections in June with a similar result.

On Thursday, King Felipe VI tasked acting Prime Minister Mariano Rajoy, whose conservative Popular Party came first without an absolute majority, with forming a government.

But he faces an uphill challenge as most other parties refuse to back him, raising concerns that Spain could eventually head to a third round of elections at a sensitive time.

The country is only just emerging from a damaging crisis, and its economy grew at one of the fastest paces in the eurozone last year, with GDP rising 3.2 percent.

Unemployment in Spain has also dropped to its lowest rate in nearly six years, reaching 20 percent in the second quarter.

But Spain is still the European Union’s second worst performer after Greece where joblessness is concerned.