Madrid : Spain's economy expanded modestly in the second quarter as exports surged and stimulus measures boosted household spending, final data showed yesterday, but analysts said the country's growth outlook was still bleak.
Gross domestic product grew 0.2 per cent from the first three months, state statistics institute INE said, confirming preliminary figures and marking the second consecutive quarterly rise after the economy pulled out of an 18-month long recession.
But Spain's economy has struggled to gain momentum, hindered by subdued domestic demand and unemployment in excess of 20 per cent, and it lags well behind the average in the euro zone, which grew 1 per cent between April and June.
Many economists believe it could slip back into recession as the government battles to trim a bloated budget deficit, a prospect Silvio Peruzzo at RBS said the latest data had done nothing to dampen.
Deceleration fears
"Clearly there is a story of slow growth compared to the other three main economies in the euro zone... We expect to see some growth moderation in the euro zone, and the risks of a further deceleration in Spain cannot be ruled out," Peruzzo said.
On an annual basis the economy contracted by 0.1 per cent in the second quarter, INE said, revising the data from an earlier 0.2 per cent decline.
The main driver behind the quarterly rise in GDP was a 10.5 per cent annual rise in exports, up from an 8.8 per cent gain in the first quarter.
Year-on-year household spending also grew, by 2.0 per cent — the first rise after seven quarterly contractions but likely the result of stimulus measures including car scrappage schemes in place through the first half of the year.
Combined with a rise in Value-added tax, the introduction of austerity and the end of many stimulus measures, many economists fear Spain could slip back into recession in the second half.
The government forecasts the economy will contract by 0.3 per cent this year, but grow by 1.3 per cent next year and 2.5 per cent in 2012.
