Drop in consumer spending and investment causes first fall in Spanish GDP in 15 years
According to a report published today by the Spanish National Institute for Statistics (INE) the Spanish economy suffered a 0.2% drop in the third quarter of this year compared to a growth of 0.1% in the previous quarter. The 0.2% fall in the economy is a significant figure because it is the first time that the Spanish economy has shown negative growth in 15 years.
In its report INE confirmed that the 0.2% drop in GDP in the third quarter of this year places the Spanish economy on the border of recession – which is technically defined as two consecutive quarterly falls in GDP. The inter-annual growth in the economy between July and September was just 0.9% which is half the figure registered for the second quarter of 2008 (April – June).
According to the INE these figures demonstrate that the Spanish economy is showing signs of slowing down as indicated by the figures for the 6th consecutive quarter.
The slow down in the economy can be partly explained by a clear drop in consumer spending and investment in the economy.
The report which has been published today coincides with forecasts made in the Bank of Spain’s most recent report on the economy which signalled that the negative growth in the Spanish economy was not only due to a significant drop in internal demand but also due to persistent instability in global financial markets.