The Spanish economy loses steam. If the output of the crisis looked unstable and fragile, recent data have heightened the concern. The Bank of Spain has put on black and white what most analysts were warning that economic growth is slowing. In its latest Economic Bulletin, Bank of Spain warns that both domestic demand and investment in construction and employment are showing less momentum. “The latest information, the financial watchdog said, suggests a less expansionary domestic demand” in the third quarter. The household consumption in July and August was lower than the second quarter, the registration of private cars continued to slow, domestic sales of large firms grew only 0.7% in July-a tenth less than in the month above and retail trade not including service-stations recorded a drop of 0.2% mom and 0.5% yoy decline.
Therefore, consumption begins to retract from its incipient, mild rally. While investment in equipment has moderated sharply upward trend in recent months, he had made to think that companies are prepared to undertake a jump in production capacity.
In addition, the Bank of Spain notes that investment in construction also points to a “possible slowdown in growth in the third quarter” after the favorable trend in the second quarter. Regarding employment, the data also lead to optimism. “The labor market is showing some moderation in job creation in July and August from the dynamism observed in the first half of the year,” says the Bank of Spain. With the aggravating circumstance that the third quarter, along with the second best time of year for employment. The Spanish economy has four consecutive quarters of positive growth between April and June and reached GDP growing by 0.6% quarter on quarter. Exports experienced a significant rebound in July, but eventually affected by paralysis of the eurozone.
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