After the disappointing growth data in the second quarter, weaker than expected, there are increasingly dark clouds for the Spanish economy, something the ECB has already warned about. According to Eurostat data released this Wednesday, Germany registered zero GDP growth between April and June, and Italy suffered negative growth of -0.3%.
Germany was in a technical recession (two quarters of negative growth) since the fourth quarter of 2022; then, GDP fell 0.4%, while in the first quarter of this year it fell another 0.1%. In the second it was unable to break out of stagnation and posted zero growth.
More striking was that of Italy, whose economy went from growing 0.6% to contracting 0.3% between April and June. The only major European country that maintains the rate is France, where GDP accelerated to 0.5% in the second quarter from 0.1% in the second.
These bad growth data, especially those of Germany, could have a very significant impact on the Spanish economy. The main cause of the poor data for the second quarter (0.4% compared to 0.5% in the first) was the collapse of exports, which subtracted 1.5 points from GDP. Growth remained positive basically thanks to the strength of domestic consumption (+1.9% thanks to the start of the tourist season) and real estate investment.
It must be borne in mind that the bulk of sales of goods and services abroad from our country (more than 55%) goes to the euro zone. In other words, if these countries consume less Spanish products, our GDP will also suffer a negative impact. At the moment, annualized Spanish growth stands at 1.8%, below the 2.1% official target of the Government of Pedro Sánchez. If the stagnation – or even the recession returns – of our trading partners continues, that objective will be unattainable.
ECB alert
The European Central Bank already warned at the beginning of the month of a progressive stagnation of the Spanish economy and the euro area as a whole in the coming months as a result of the effect of the continuous rises in interest rates, which are causing an aggressive contraction of credit due to the high cost of it. He also anticipated a rise in inflation after the moderation in recent months, since the rise in wages must be added to the new rise in oil prices.
As will be remembered, during the last electoral campaign, Sánchez repeatedly assured that the Spanish economy was the most robust in Europe and that inflation was the lowest, having been below the 2% bar. According to the data held by the ECB and the calculations of its technical team, the impressions of the current Spanish Executive -and of its Vice President and Minister of Economy, Nadia Calviño, who has insisted the most on the matter- are a pure mirage, since in the short and medium term, the rate of production in our country will worsen and inflation, especially core inflation, will continue to show strong downward resistance.
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