Spanish growth may slow down, analysts warn

24th November 2004, Comments 0 comments

24 November 2004, MADRID- The Spanish economy has grown 2.6 percent in the third quarter causing analysts to warn that full-year growth might fall short of the government's 2.8-percent target.

24 November 2004

MADRID- The Spanish economy has grown 2.6 percent in the third quarter causing analysts to warn that full-year growth might fall short of the government's 2.8-percent target.

Gross domestic product grew by 0.6 percent in the third quarter from the figure for the second quarter.

That was 0.1 percent higher than growth in the second quarter, according to official data published by the National Institute of Statistics (INE).

But in the third quarter investment in equipment surged by 8.1 percent from growth of 0.4 percent in the second quarter.

The 12-month growth figure for the third quarter is significantly higher than the eurozone average of 1.9 percent.

Growth continued to be driven by domestic demand which grew by 4.6 percent over 12 months from 4.2 percent in the second quarter.

But foreign demand declined by 2.0 percent after a decline of 1.6 percent in the second quarter.

Growth of household consumption was constant at 3.4 percent.

On a 12-month basis, investment in equipment rose by 9.8 percent from 4.3 percent in the second quarter.

An analyst at savings bank Caja Madrid, Israel Munoz, said that this was the biggest increase since 1999.

Investment over 12 months in the construction sector, the most dynamic area of the Spanish economy, grew by 4.5 percent from 4.2 percent in the second quarter.

Exports of goods and services grew by 4.2 percent over 12 months after an increase of 3.5 percent in the second quarter. Imports grew by 9.6 percent after 8.1 percent in the second quarter.

Analysts said that the figures signalled that the Spanish economy was highly unlikely to grow this year by as much as 2.8 percent, the official forecast.

Economy Minister Pedro Solbes has already acknowledged this,suggesting that the outcome was likely to be closer to 2.6-2.7 percent.

He blamed unexpectedly high oil prices and unexpectedly weak growth in the euro zone.
  
[Copyright EFE with Expatica]

Subject: Spanish news

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