Spain: 2Q14 Quarterly National Accounts

As foreseen in our last Spain Economic Outlook, the Spanish economy closed the first semester of 2014 with another acceleration of the recovery that started a year ago. GDP growth in the second quarter (+0.6% QoQ) is consistent with our baseline scenario of 1.3% growth for 2014 and 2.3% for 2015. Despite these overall positive figures, some of the features relating to the composition of growth must be carefully considered: both public consumption and net external demand stagnated. Economic recovery was accompanied by significant employment creation and the stagnation of productivity. These, together with the YoY fall on prices, imply that the correction in unit labour costs came has halted.

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