Spain worried of economic growth

Consumers have been the key to the Spanish economic recovery, but that may be about to change.

The nation’s economic turnaround began in 2014, when an improving jobs market and slowing inflation gave households more cash to spend, unleashing years of pent-up demand. The Spanish economy surged ahead, growing at a pace of more than 3 per cent.

But there are now signs the spending could cool, replacing Catalonia’s failed independence bid as the biggest risk to the Spanish economy. And the financial health of shoppers matter. Private consumption remains the largest component of gross domestic product, accounting for more than half of total output. “Some of the tailwinds are fading,” said Angel Talavera, lead economist as Oxford Economics in London. “The pace of job creation is going to slow as the unemployment rate drops, wages have remained stagnant and the savings rate for families is close to a historic low.”