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Bloomberg
The Spanish economy probably grew 0.7 percent in the second quarter as increased employment and favorable financing conditions supported consumption, the Bank of Spain said.
Most recent data continued to show “robust growth†even as expansion of business investment showed a certain slowdown, the regulator said in its monthly economic bulletin published on Tuesday, citing preliminary data from available indicators. Retail sales rose 2.3 percent in May from the same period a year earlier, the National Statistics Institute said earlier.
The Spanish central bank’s latest estimate comes after caretaker PMMariano Rajoy secured a better-than-expected election result on June 26, increasing his People’s Party representation in parliament to 137 seats compared to 123 in December. Rajoy fended off a challenge by the anti-austerity platform Podemos by stressing his record on restoring economic growth and pledging to create 2 million jobs by 2020.
So far, the Spanish economy has shrugged off political uncertainty to continue growing for 12 quarters in a row. Even so, the Bank of Spain sees growth slowing down to 2.7% this year and 2.3% in 2017. Rajoy said last week he expected growth would top 3 percent this year. The National Statistics Institute is set to publish data for second quarter GDP at the end of July.
Spain’s Bonds Extend Recovery
Spanish bonds rose with their Italian peers as investors awaited any sign of clarity as to how the continent’s leaders will deal with the fallout from Britain’s decision to exit the European Union.
The extra yield, or spread, that investors get for holding 10-year Italian bonds rather than their German counterparts has narrowed 0.4 percentage point from its peak in the wake of the July 23 U.K. referendum. Spain’s securities extended a rally which on Monday pushed 10-year yields down by the most since mid-2014, even as the country’s second general election in less than a year left politics in deadlock.
Spain’s 10-year bond yield fell nine basis points, or 0.09 percentage point, to 1.36 percent as of 9:40 a.m. London time. The 1.95 percent security due in April 2026 climbed 0.875, or 8.75 euros per 1,000-euro ($1,107) face amount, to 105.385.
That yield is the lowest since April 2015. On Monday it tumbled 18 basis points in the biggest drop since June 2014.