The Spanish economy overcame the country’s political impasse to grow more than forecast in the second quarter, keeping the pace of the recovery alive.
Output grew 0.8 percent in the three months through June, the Madrid-based National Statistics Office said Thursday, beating an initial reading of 0.7 percent expansion. The median estimate of economists in a Bloomberg survey also called for 0.7 percent growth. From a year ago, the economy expanded 3.2 percent, while adding about 484,000 new jobs.
Household consumption jumped 0.7 percent in the three months through June, the statistics office said, while investment in construction, a sector battered by the economic crisis, ticked up 0.9 percent in the same period. Exports rose 4.3 percent.
The country has been grappling with a political impasse after two inconclusive elections that stripped caretaker Prime Minister Mariano Rajoy of his parliamentary majority.
The latest data come as Rajoy prepares to face a confidence vote on Aug. 31 in his bid for a second term in office. While his People’s Party has struck a preliminary agreement with the Liberals of Ciudadanos, he’s still running short of support as the Socialist party refuses to endorse him. Without their backing, even in the form of an abstention, he’s likely to lose the vote and put the nation on track for a third election in a year.
Spain could also miss a September deadline to draft a budget for 2017 that should be submitted to officials in Brussels by October if there’s no government in place. After dodging a fine for missing its deficit goal last year, Acting Economy Minister Luis de Guindos said Spain is fully committed to narrowing its budgetary shortfall below 3 percent of gross domestic by 2018 as agreed with European authorities.
Despite the political deadlock, the Rajoy administration sees the economy growing to 2.9 percent this year up from a previous forecast of 2.7 percent, before slowing to 2.3 percent in 2017.
