According to the forecasts of the Banco de España, in the third quarter, the Iberian country should show weaker growth, almost zero. The Spanish GDP would decrease by 0,2% compared to the previous quarter, however marking a +0,7% on an annual basis.
Weighing on the weak Iberian economy is the contraction of domestic demand (-0,8% in the third quarter). And this decrease is a consequence of the uncertainty of families, who tend to consume less, the cuts in public spending and the downward trend in real estate investment. However, the fall in domestic demand was compensated for by foreign demand, thanks to the "dynamism of exports of goods and tourism".
Another figure that weighs on Spain's accounts is the high unemployment rate which reached 21,52% in the third quarter, a record since 1996.
The Spanish central bank considers it "essential" to adopt additional measures to demonstrate the austerity compromise made with Europe, under penalty of not reaching the target of reducing the deficit to 6% of GDP in 2011. The first official reading of the Pil will be published on November 11th.
The spread between the Spanish bonos and the German Bunds has been increasing since this morning and has reached 354 basis points (+6,53%).
