Spain’s quarterly growth slows to 0.2%, below expectations

MADRID, Oct 28 (Reuters) – Spain’s economic growth slowed sharply to 0.2% in the third quarter from the previous three-month period when gross domestic product rose 1.5%, slightly missing expectations, according to flash data from the National Institute of Statistics released on Friday.

The economy was held back by a drop in investment, reflected in particular by the slowdown in construction, which however could not offset a good performance in the services sector driven by a sustained tourist season.

Private consumption still increased by 1.1% during the quarter, resisting the high inflation recorded during the summer months, when it was above 10%.

The INE said separately on Friday that Spanish consumer prices in the 12 months to October rose 7.3%, a slower pace than September’s 8.9% and the fastest reading low since January.

Analysts polled by Reuters had expected GDP growth of 0.3% quarter-on-quarter.

On an annual basis, Spanish economic output in the third quarter rose 3.8%, compared to 3.9% according to a Reuters poll. In the second quarter, annual growth totaled 6.8%.

The government has said that Spain will not go into recession in the next few quarters, as it is basing its hopes on the resilience of the labor market. Read more

Reporting by Joanna Jonczyk-Gwizdala and Belen Carreno, writing by Andrei Khalip

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