Spain’s growth accelerates but falls short of summer season forecasts

A waiter waits for customers at a restaurant near Playa de Figueretas in Ibiza on July 30, 2020. - There is no second wave of the coronavirus pandemic in Spain despite a fresh surge in infections in the country, a top health ministry official said. The pandemic has dealt a major blow to Spain's key tourism sector, which accounts for about 12 percent of its economy. (Photo by JAIME REINA / AFP)
A waiter waits for customers at a restaurant near Playa de Figueretas in Ibiza. Spain's growth in the third quarter was driven by the services sector which expanded by 3.2 percent.(Photo by JAIME REINA / AFP)
Growth in the Spanish economy picked up pace in the third quarter as coronavirus restrictions were eased during the critical summer tourist season, data released Friday showed, but still fell short of expectations.

Data from Spain’s national statistics office (INE) showed that the Spanish economy grew by 2.0 percent from July through to September compared to the previous three months.

While that was an improvement from the 1.1 percent growth rate in the second quarter, that figure was a sharp revision lower by INE from its initial estimate of 2.8 percent growth for that quarter as consumption turned out to be lower than expected.

That takes much of the shine off the third quarter results.

Moreover, Spain’s national bank had been forecasting 2.8 percent growth.

It will also impact annual growth performance and the government budget.

“A revision of that scale mechanically results in a steep drop in 2021 GDP growth and to a more limited extent in 2022,” said the head of Bank of Spain, Pablo Hernández de Cos.

The Spanish government, which forecasts 6.5 percent growth this year, did not immediately update its outlook. Nor did the Bank of Spain, which has a forecast for 6.3 percent growth this year.

Growth in the third quarter was driven by the services sector which expanded by 3.2 percent.

The commerce, transport and hotel sector rose by 7.9 percent.

The industrial sector expanded by 2 percent and construction by 1.8 percent. Agriculture contracted by 5.5 percent.


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