SPAIN: GDP Outperformance Consistent With Survey Data

Spanish GDP rose 0.8% Q/Q for the second consecutive quarter according to the preliminary Q2 release. Bloomberg consensus had expected a 0.5% Q/Q reading. Spain is thus likely on track to outperform the other three major Eurozone economies again (based on the French Q2 prelim release and the German/Italian consensus prints), consistent with recent PMI data.

• INE noted that external demand contributed 0.5pp to GDP (with exports growing 1.2% Q/Q and imports falling 0.2% Q/Q), while domestic demand contributed the remaining 0.3pp.
• Within domestic demand, gross fixed capital investment grew 0.9% Q/Q while household consumption grew 0.3% Q/Q. Government consumption was 0.2% Q/Q.
•  The softer household consumption growth (relative to other components) is consistent with recent survey evidence (e.g. consumer and retail sales) and hard data (e.g. retail sales).
• On the production side, all major sectors of the economy registered positive sequential growth in value added, led by manufacturing (1.1% Q/Q) and services (0.9% Q/Q). However, INE notes that the Q/Q growth rates for manufacturing and construction were over 1pp below the Q1 level.
• We will provide additional analysis on the income breakdown of GDP (i.e. the GDP deflator and its components) in the coming days.