Spain growth accelerates but misses forecasts

Growth in the Spanish economy picked up pace in the third quarter as coronavirus restrictions were eased during the critical summer tourist season, data released Friday showed, but still fell short of expectations.

Data from the national statistics service INE showed that the Spanish economy grew by 2.0 per cent in July through September from the previous three months. 

While that was an improvement from the 1.1 per cent growth rate in the second quarter, that figure was a sharp revision lower by INE from its initial estimate of 2.8 per cent growth for that quarter as consumption turned out to be lower than expected.

That takes much of the shine off the third quarter results. Moreover, Spain’s national bank had been forecasting 2.8 per cent growth.

It will also impact annual growth performance and the government budget.  

“A revision of that scale mechanically results in a steep drop in 2021 GDP growth and to a more limited extent in 2022,” said the head of Bank of Spain, Pablo Hernandez de Cos.

The Spanish government, which forecasts 6.5 percent growth this year, did not immediately update its outlook. Nor did the Bank of Spain, which has a forecast for 6.3 per cent growth this year. 

Growth in the third quarter was driv