November 28, 2020

GDP bounces 16.7% in the third quarter




The Spanish economy left the recession in the third quarter of the year after registering a GDP growth of 16.7% between July and September, its greatest quarterly advance in the historical series managed by the National Statistics Institute (INE) and which began in 1970. Until now, the largest quarterly rise in GDP corresponded to the third quarter of 1972, when it rose by 2 ,two%.

With the strong advance of GDP in the third quarter, once the state of alarm had ended, Spain came out of the technical recession in which it entered the second quarter of the year after having recorded two consecutive negative quarters with falls in the economy of 5.2% in the first quarter and 17.8% In a second.

The quarterly increase in GDP in the third quarter, which the INE must confirm on December 23, exceeds the forecasts that the Government managed, which pointed to quarterly growth of around 13%.

In year-on-year rate, GDP for the third quarter contracted 8.7%, compared to the 21.5% decrease in the previous quarter. This is the second largest year-on-year decline in the entire series after that registered in the second quarter of this year.

National demand subtracted 7.8 points from the interannual variation of GDP in the third quarter, a rate 11 points higher than that of the second quarter. For its part, external demand subtracted 0.9 points, which is 1.8 points more than in the previous quarter.

Quarterly data shows a historical rise in household consumption of 20.7%, in contrast to the drop, also historical, that this indicator registered in the second quarter (-20.4%). For its part, public spending increased between July and September by 1.1%, eight tenths more than in the second quarter, while consumer spending by non-profit institutions and at the service of households fell by 0, 4%, compared to the 0.2% increase in the previous quarter.

Investment, on the other hand, registered a historical advance of 19.9% ​​in the third quarter (-22.1% in the second quarter), with a record increase of 34.7% in the case of investment in machinery and equipment goods. Investment in housing, for its part, grew by 16.6%, compared to the decline of 22.6% in the second quarter. In year-on-year terms, investment fell 11.9%, moderating by almost 14 points the historical decline experienced in the second quarter (-25.8%).

Exports and imports also shot up in the third quarter, 34.3% in the first case and 28.4% in the second. Sales abroad came from falling 33.4% in the previous quarter, while imports fell 29.5% in the second quarter. But this statistic falls by 17% compared to the third quarter of 2019, in contrast to the year-on-year decrease of 38.1% experienced in the previous quarter, while imports fell by 15.7% and had decreased by 33.5% in the second trimester.

Hours worked grew 24.7% in the third quarter, although the rate fell to 16% in the case of full-time equivalent jobs. In year-on-year terms, employment fell by 5.5%, 12.9 points more than in the second quarter, which represents the destruction of 1,012,000 jobs full-time equivalents in one year.

All sectors registered significant quarterly advances, except for agriculture, which barely grew compared to the previous quarter (0.2%), since it was one of the activities that was maintained during the lockdown. The industry grew 27.4%; construction, 22.5%; and services, 15%, although with a significant increase of 42.5% for commerce, transport and hospitality, some of the activities most affected in the second quarter. However, in year-on-year comparison, only agriculture grew (5%), while the rest of the sectors continued to decline, with decreases of 3.6% for industry, 11% for construction and 9.8% for services, with a 22% contraction for commerce, transport and hospitality.

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