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Labor productivity in Spain is counter-cyclical, unlike in the majority of developed economies. This phenomenon is mainly due to the poor functioning of the labor market. There is an urgent need to adopt reforms to boost sustained productivity growth
Industrial Production (IP) increased by 5.1% yoy in calendar adjusted terms, parallel to the market expectation of 5.5% in November. Thus, IP grew by 4.5% yoy in October-November period. We expect GDP growth in 4Q19 at around 5%, implying 0.8% growth in 2019. Our baseline forecast for 2020 GDP growth remains at 4%.
At the end of the year, the economy could string together three consecutive quarters with an increase of 0.4% QoQ, below the growth observed since the beginning of the recovery (0.7% QoQ, on average). In this context, job creation has stabilized, there is a more volatile composition of demand and low inflation
Turkish Economy grew by 0.9% yoy in 3Q19 (Consensus; 1%), the first positive YoY growth since 3Q18. The GDP grew by 0.4% in quarterly terms, signaling some momentum loss comparing 1.2% qoq in 2Q19. We maintain a prudent GDP growth forecast of 0.3% for 2019 with some upside risk and a neutral 3% for 2020.
The Spanish economy could continue growing at a quarterly rate of 0.4% in 4Q19, the same as the previous two quarters. If this is confirmed, 2019 would close with an average annual increase of 2.0%, 0.4 pp less than in 2018.
The Spanish economy grew 0.4% QoQ (2.0% YoY) in 3Q. According to the flash estimate, the domestic demand explained the increase (1.1pp QoQ; 1.8pp YoY), thanks to the recovery in consumption and investment. On the contrary, the external demand dragged down growth (-0.7pp QoQ; 0.2pp YoY), due to the strong rebound of imports
GDP growth in Q3 could be around 0.5% QoQ, a slightly weaker evolution than that consistent with the BBVA Research outlook for 2019 (2.3% YoY). Partial economic indicators show some signs of weakness on domestic demand and job creation, while external demand could grow again
Turkish Economy contracted by 1.5% in annual terms in 2Q19, better than market expectation but worse than ours (-2% Consensus vs. -1% BBVA Research). In quarterly terms, the economy grew at 1.2%, avoiding the “W” pattern but moderating from 1.6% QoQ in 1Q19. We still maintain our GDP growth forecast at 0.3% for 2019.