The Spanish economy only shrank 0.1% compared to 0.4% in the first quarter. The country has suffered nine quarters of negative growth already. However, recession will come to an end by the next quarter, as Secretary of State for economy, has stated. Madrid already speaks about a ‘turning point’, although the majority of analysts are somewhat more cautious and say we must wait until the end of the year.
For the time being, exports of goods and services have closed the second quarter of the year with a growth of 9.2 percent, which contrasts with the stagnation observed in France, Germany or Italy. The key to progress lies in the increase in demand from Europe and, in particular, of France, Portugal… and United Kingdom. Domestic consumption, although it continues its decline, only fell by a slight 0.1%.
Inflation data has also given Spain a break. The IPC fell three tenths to 1.5% in August, but it will not be easy to comply with the government expectations of 1% by the end of 2013. Spain is highly dependent on oil and the barrel of Brent has skyrocketed already above 116 dollars due to the tension in the Middle East.
Having said that, investors are much more worried about how the increase in the price of crude oil can affect global economic growth. Manuals indicate that a rise of 10 dollars per barrel means a reduction of 0.5% of GDP in Western economies.