The Spanish economy grew by a faster rate than expected in the second quarter of this year, driven by increased investment and an uptick in household spending.
Gross domestic product (GDP) grew by 0.8 per cent, up 0.1 percentage points from initial estimates. This is the same rate of growth Spain has seen in each quarter over the last 12 months, and is "by some margin the strongest rate of all the larger euro area member states", according to Chris Scicluna, head of economic research at Daiwa Capital Markets. Figures out yesterday showed the German economy slowed in the second quarter of 2016.
"Spanish growth is likely being maintained close to the recent trend in the current quarter too, not least as tourist visitor and spending numbers this summer are trending significantly above their levels a year ago," Scicluna added.
Figures from the Instituto Nacional de Estadistica showed a year-on-year growth rate of 3.2 per cent.
Growth in the Eurozone state was driven by a 1.3 per cent uptick in investment, while household consumption expenditure increased 0.7 per cent. Exports were up by 4.3 per cent and imports grew by 2.7 per cent.
The Spanish construction sector contracted by 0.7 per cent, while financial and insurance activities contracted by 1.8 per cent.
Spain recently avoided a fine for breaking the EU's budget rules - it ran a deficit of 5.1 per cent last year, and members of the Eurozone are forbidden from running deficits in excess of three per cent of GDP. Portugal also dodged a payout - countries can face a fine of 0.2 per cent of GDP - after the European Commission recommended the fines be cancelled, acknowledging "the challenging economic environment, both countries' reform efforts and their commitments to comply with the rules of the stability and growth pact".