Spending by Spanish households boosted the economy last year, along with exports, but 2017 may be trickier.
Spain’s economy expanded by 0.7 percent between October and December from the previous three months, the National Statistics Institute has confirmed in its final growth assessment.
Quarterly growth at the very least will be similar to what we had in the second half of last yearSpanish Economy Minister
For all of 2016, the economy grew by 3.2 percent, the same as in 2015. It was the third straight year of expansion since the country came out of recession.
Consumer spending was helped by a recovery in the job market while exports hit a new high last year.
The number of people signing on to pay social security – a measure of job creation – rose by 74,080 month-on-month, the Labour Ministry said.
That was more than in February 2016, helped by hiring in construction, education and hotels and restaurants.
Spain – Q4/16 GDP growth was confirmed at 3.2%yoy making it the second fastest growing economy in the Eurozone, second only to Ireland.— Mehrdad Yousefi (@MY21_Oracle) March 2, 2017
However, maintaining that pace of growth this year may be trickier.
Weak inflation previously boosted households’ disposable income but consumer prices spiked year-on-year in January and February as energy costs rose.
In addition the pace of job growth is expected to slow and the government is planning budget cuts.
But Economy Minister Luis de Guindos remains optimistic.
“Quarterly growth at the very least will be similar to what we had in the second half of last year,” de Guindos told Radio Nacional on Thursday. He expects lower inflation in the second quarter.