Figures point to gradual slowdown in economy

29th November 2007, Comments 0 comments

29 November 2007, Madrid - Economic data released yesterday confirmed that the Spanish economy is on course for a gradual slowdown.

29 November 2007

Madrid - Economic data released yesterday confirmed that the Spanish economy is on course for a gradual slowdown.

The National Statistics Institute said retail sales in October after factoring out inflation and adjusting for calendar effects were up 1.3 percent, down from 2.0 percent the previous month, as higher borrowing costs start to take their toll. The European Central Bank has raised interest rates eight times since the end of 2005.

The government expects growth in GDP to slow to about 3 percent next year from an estimated 3.8 percent this year.

According to figures released by the Bank of Spain yesterday, growth in company net earnings slowed to only 3 percent in the first nine months of the year from almost 40 percent a year earlier when profits were boosted by strong capital gains.

The head of the central bank's research department, José Luis Malo de Molina, told a news conference the figures were consistent with a "slight slowdown in activity. We are not looking at a sharp correction in the pace of growth," he said.

However, Malo de Molina reiterated the central bank's concerns about high levels of corporate debt, which stood at 323 percent of their gross value added as of September, compared with 308 percent in 2006 and 233 percent in 2005.

[Copyright EL PAÍS, SL. 2007]

Subject: Spanish news


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