The Spanish economy remained at a standstill in the third quarter of 2011. According to preliminary data from the national institute of statistics (INE), the GDP grew by 0,0%, as planned by the Central Bank at the end of October. On an annual basis, the rate of 0,8% is confirmed.
According to Ine, the growth of the foreign sector (above all tourism) has only partially compensated for the negative contribution of domestic demand. As the Banco de España had stated, the slowdown is mainly due to cuts to public administration and the prolonged contraction of the construction sector.
Finally, according to the Institute of Statistics, he underlined the risk of not reaching the deficit target of 6% of GDP in 2011. Detailed data will be published on 16 November.
According to EU data, the Spanish economy should fall in the last six months of the year and even score a -0,1% to start growing again only in 2013 with a 1,4% increase in GDP.
How's that Italian taste, the spread between Spanish bonos and German bunds also dropped to 400bp this morning, from yesterday's close at 423bps.
