Global| May 18 2011Spain's GDP Progress Slips Sideways
Summary
At 1.2% at a compounded annual rate Spain's GDP is advancing in 2011-Q1. But the pace is not impressive and the momentum is lacking as well. While Europe frets and stews over Greece the IMF warns that the debt crisis could spread to [...]
At 1.2% at a compounded annual rate Spain's GDP is advancing in 2011-Q1. But the pace is not impressive and the momentum
is lacking as well. While Europe frets and stews over Greece the IMF warns that the debt crisis could spread to the EMU core
and as the IMF struggles with its own bureaucratic nightmare Spain's growth limps along. And this is a large EMU member country,
one worthy of attention. The consumer sector is the backbone of Spain's spending as household expenditure makes up nearly 59% of GDP
Spanish. Yet in 2011 Q1 the pace of that spending went dead flat.
Non-Profit spending that makes up 21% of GDP carried the load in Q1 as that spending grew by 5.7% boosting GDP by 1.2% and producing essentially al the boost to GDP in 2011-Q1. But Spain is a country putting austerity measures in place so it is unlikely that spending by nonprofit organizations can continue to be such a large part of GDP, let alone all of the growth.
Spain's export growth continues to outstrip import growth. The added pace of exports has added to GDP growth in the recovery period. But the trade balance is still in deficit. Overall domestic demand continues to be weak. In Q1 2011 domestic demand turned positive after two quarters of declining. The Yr/Yr growth for domestic demand is still crippled and persistently shrinking. Spain's 'recovery' clearly is on unstable footing.
While the preoccupation in the Zone has been with Greece, Spain is a more important economy to the Zone in terms of size. Concerns that Greece's debt problems could cause it to throw in the towel on the e-Zone are a reason for Greece to get an outsized amount of attention. But keeping Spain among the living breathing and prospering euro-economies is still a very important goal especially as Portugal has succumbed to market pressures and is tapping the now-strained stabilization fund. For now Spain appears to be on the razors edge of growth. Spain may not be in the eye of the market speculator at the moment and that is a good thing. But Spain is just barely getting by.
| Spain's GDP | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| HouseH | Consump | NonProfit | Gross | Trade | |||||
| GDP | Expend | Public | Consump | Fixed Invst |
X-M: bns |
Export | Import | Domestic Demand |
|
| % Change Q/Q SAAR; X-M is Q/Q Change in Blns of Euros | |||||||||
| Q1-2011 | 1.2% | 0.0% | 5.7% | 5.3% | -5.6% | 0.5 | 21.6% | 16.3% | 0.2% |
| Q4-2010 | 0.9% | 1.1% | -2.8% | -2.4% | -5.7% | 1.2 | 16.6% | 6.6% | -1.6% |
| Q3-2010 | -0.1% | -3.8% | -2.9% | -1.5% | -10.6% | 3.3 | 2.0% | -16.2% | -6.4% |
| Q2-2010 | 1.3% | 6.0% | 4.6% | 2.6% | -1.2% | -2.0 | 5.6% | 17.8% | 5.3% |
| % Change Yr/Yr; X-M is Yr/Yr Change in Gap in Blns of Euros | |||||||||
| Q1-2011 | 0.8% | 0.7% | 1.1% | 1.0% | -5.8% | 3.0 | 11.2% | 5.2% | -0.7% |
| Q4-2010 | 0.6% | 1.7% | -0.9% | -0.3% | -6.1% | 2.4 | 10.5% | 5.3% | -0.6% |
| Q3-2010 | 0.2% | 1.6% | -0.7% | 0.4% | -6.7% | 1.9 | 9.4% | 5.0% | -0.7% |
| Q2-2010 | 0.0% | 2.2% | -0.1% | 1.1% | -6.7% | 0.1 | 11.9% | 9.6% | -0.1% |
| 5-Yrs | 0.5% | 0.2% | 3.3% | 1.9% | -5.3% | N/A | 2.7% | -1.0% | -0.7% |
| % of GDP | 100.0% | 58.7% | 21.5% | 1.0% | 21.5% | -2.9% | 33.1% | 36.0% | 102.9% |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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