Spanish economy slows in 2018

Spain’s economic growth slowed in 2018 to its lowest rate in four years as external demand dropped, official data showed Thursday.

The Spanish economy expanded by 2.5 percent last year, down from 3.0 percent in 2017 and its slowest annual growth rate since 2014 when it grew 1.4 percent, figures released by national statistics institute INE showed.

“It is normal, in an economic cycle, for growth to be gradually more moderate after the peak achieved in 2015,” Economy Minister Nadia Calvino said during an interview with radio Onda Cero, before pointing out that growth had picked up in the fourth quarter of 2018.

The Spanish economy expanded 0.7 percent in the final quarter of 2018, up from 0.6 percent in the third quarter, according to the INE figures.

“These rates continue to be much higher than those of our neighbours and the European Union average,” Calvino added.

Growth in the eurozone slowed sharply to 1.8 percent in 2018, down from 2.4 percent in the previous year, separate data showed Thursday, as slumping exports in Germany and worries over Brexit sapped momentum.

Spanish economic growth was underpinned last year by healthy household consumption, which helped offset a 0.4 percent fall in external demand, the INE figures showed.

The Bank of Spain has warned of downside risks to the economy from protectionism and emerging-market turmoil.

Domestically, Prime Minister Pedro Sanchez’s minority Socialist government is struggling to approve its draft 2019 budget in parliament and push through reforms.

The government lowered its economic growth forecast for 2019 at the beginning of the month to 2.2 percent from 2.3 percent previously.

Spain was in or near recession from 2009 to end of 2013 after a property bubble burst in 2008 sent the economy into a downward spiral, throwing millions out of work.

The recovery since has outpaced the rest of Europe, driven by stronger exports and rising domestic demand.