Spain: Growth slows down slightly, but it is still ahead of peers

“We think it is nonetheless consistent with our 2014 real GDP forecast of 1.3% y/y. We also retain our forecast for 2015 at 1.8% y/y, but we highlight downside risks partly stemming from weak policy coordination and lack of growth drivers at the European level,” analysts at Barclays commented.

Overall, activity in Spain continues to recover at a faster pace than in the other large EA peers. Fiscal consolidation seems on track (based on September data) for the aggregate public sector to meet the -5.5% of GDP target, but composition is likely to be different from the original plans, as September/August fiscal data show that regions may experience some slippage (c. 0.5pp of GDP) vs a target of -1.0% of GDP.

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