The Spanish economy grew by 2 percent in the third quarter of the year, which represents a rebound compared to the rise of 1.1 percent in the second and the fall of 0.6 percent in the first, according to the National Institute of Statistics (INE).
This is the highest quarterly rate growth since the fourth quarter of 1972, without taking into account the third of 2020, when it soared 16.8 percent after confinement.
Nevertheless, the figure is lower than that calculated by the Bank of Spain. The agency estimated that the Spanish economy grew 2.7 percent from June to September, which caused it to raise the growth forecast for the end of the year.
This data for the third quarter must also be taken into account that the INE sharply cut the calculation of the second quarter, going from initially calculating an increase of 2.8 percent to 1.1 percent, which reveals that the economic recovery is stagnating.
The downward revision of the growth forecast
Despite the fact that the economy has had positive rates for two quarters, the downward revision of the INE of the growth of the second quarter will weigh down the final photo.
The Bank of Spain has already said that it would revise its GDP estimate for this year downward and it is expected that it will not be the only one.
The latest forecasts from Bank of Spain projected a GDP growth of 6.3 percent in 2021, which would decline slightly to 5.9 percent in 2022. For its part, the Government expects growth of 6.5 percent for this year and 7 percent in 2022.
It is not the only problem for the Government
Despite the review of the INE to the fall of the Spanish GDP, the Government of Pedro Sánchez insisted on maintaining its macro framework for the preparation of the General State Budgets for fiscal year 2022.
If not fulfilled, negatively impact revenue, failing to comply with the deficit reduction forecast and will generate another hole in the State accounts.
This, in addition, runs the risk of worsening with skyrocketing inflation. Since the data of the 5.5 percent implies higher spending on pensions, employee salaries, lower consumption and the possibility of having to raise taxes so that the public accounts come out.
The economy grows 2.7 percent year-on-year
With the data published by the INE, it is revealed that the Spanish economy grew 2.7 percent year-on-year.
In this positive evolution of the Spanish economy highlights household consumption, which after the end of the restrictions began to release the savings generated, and increased 1.1 points year-on-year. Chain two quarters with positive rates.
Public spending increased 2.9 percent. It had four quarters with rates above 3 percent. Investment, meanwhile, fell 0.2 percent. It has been negative in six of the last seven quarters.
For its part, domestic demand contributed 1.5 points to the year-on-year evolution of GDP, while external demand contributed 1.2 points (this is its most positive contribution since the third quarter of 2016).
Employment in national accounts grew 6.2 percent, representing an increase of 1.06 million full-time jobs.