The beginning of 2019 saw Spain’s economy grow at a similar pace to that at the end of 2018, with a stronger-than-expected domestic demand counterbalancing a slowdown in exports.
Spain’s optimistic growth rate differed from that in Germany, with a slower-than-expected expansion affecting the European Central Bank. ECB Vice President Luis de Guindos revealed that inflation and growth in the region is expected to proceed at its slow pace throughout the year.
On the other hand, central bank forecasts showed that Spain’s GDP grew by 0.6% in the January to March period from a quarter earlier. This follows 0.7% growth at the end of 2018 and shows an expansion similar to that seen in the first three quarters of last year.
Flash gross domestic product data will be published on April 30th by the National Statistics Institute.
In an annual report, the bank said: “Spain has not been immune to exterior disturbances, which manifested itself at the end of last year as a notable loss of export strength.”
It went on to say: “However, the internal dynamism has compensated for the deterioration of external factors to the extent that it has not produced a deceleration in activity as seen throughout the euro zone.”
The bank pointed out how strong job creation and a rising purchasing power boosted private consumption in Spain, as a result of low inflation and falling savings. A period of growth was prolonged in the medium term as foreign markets improved, with added competition surrounding Spain’s export businesses and good financing conditions.
The Bank of Spain’s forecasts for 2019 are at risk of being changed, due to uncertainty surrounding Brexit, increased global protectionism and a potential Chinese economic slowdown.
Meanwhile, the bank said that decreasing the public deficit and debt should be tackled, in order to safeguard the economy against any chance of future shocks.
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