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Spain Q2 GDP growth below forecasts

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Christian Fernsby ▼ | July 31, 2019
Spain’s economy expanded 0.5 percent on quarter in the three months to June of 2019, easing from a 0.7 percent advance in the previous period and below market expectations of a 0.6 percent increase, a flash estimate showed.
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Household consumption and government expending slowed while fixed investment contracted and net trade contributed positively to growth.

According to preliminary estimates, household consumption rose 0.3 percent, slowing from a 0.4 percent in the prior quarter and government expenditure edged up 0.2 percent, after expanding 0.4 percent.

In addition, fixed investment contracted 0.2 percent, down from a 1.4 percent rise, mainly due to investment in tangible fixed assets (-0.3 percent vs 1.9 percent), of which machinery, equipment, weapon system and biological resources (-2.5 percent vs 4.3 percent).

On the other hand, investment in intellectual property products rebounded (0.5 percent vs -1.1 percent).

Both exports (1.8 percent vs a flat reading) and imports (1 percent vs -0.3 percent) rebounded.

On the production side, the industrial activity increased 0.3 percent in the three months to June, slowing from a 1.1 percent gain in Q1.

Also, construction output rose 1.3 percent, below a 1.5 percent advance and the services output went up 0.4 percent, after a 0.8 percent growth.

Meantime, the primary sector shrank 0.5 percent, less than a 2 percent contraction in Q2.

On an annual basis, the GDP is expected to advance 2.3 percent in the second quarter of 2019, less than a 2.4 percent growth in the prior quarter and in line with market consensus.