By Inti Landauro
MADRID (Reuters) -Spain’s economic growth accelerated in the second quarter, slightly exceeding expectations and further widening the gap with euro zone peers whose growth remains sluggish at best.
Gross domestic product expanded 0.7% in the second quarter from the previous three-month period, when it grew 0.6%, preliminary data from the National Statistics Institute showed on Tuesday. The growth was faster than the 0.6% expected by analysts polled by Reuters.
On an annual basis, Spain’s second-quarter economic output expanded 2.8%, above the 2.5% expected by analysts.
The growth was stoked by investment, “which had been sluggish in this recovery so far” and consumption, Economy Minister Carlos Cuerpo said in an interview on Tuesday, adding that investment in housing, which is one of Spain’s key bottlenecks, should contribute to growth in the longer term.
The INE said services led the increase in activity quarter-on-quarter, mainly thanks to a surge of retail, lodging and transportation, while construction and manufacturing also rose, even as agriculture contracted.
The economic growth coincided with a decline in the unemployment rate to 10.29%, in the second quarter, the lowest level since early 2008.
“We are in a phase of increased growth due to the feedback loop between immigration, employment, and private consumption. Growth in consumption attracts more immigrants, which then boosts employment,” said economist Juan Carlos Martinez Lazaro, professor at IE business school in Madrid.
That combination, also amplified by a booming tourism industry, is one of Spain’s main advantages compared to other big European countries, he added.
Spain’s strong economic activity contrasts with expectations of only anaemic growth in France, Germany, Italy and the euro zone as a whole. Second-quarter data for these countries are expected to be released on Wednesday.
Analysts polled by Reuters expect the euro zone’s GDP to have remained flat in the quarter, with the French and Italian economies seen eking out just 0.1% growth and Germany’s GDP shrinking 0.1%.
The Spanish government expects 2.6% growth this year.
(Reporting by Tiago Brandao and David LatonaWriting by Inti LandauroEditing by Andrei Khalip and Peter Graff)
