• The annual rate stands at 0.5%, the first positive figure since mid-2011
  • The contribution of national demand has been positive by 0.7 points, for the first time since 2010
  • Between January and March 21,500 jobs have been created, almost double the number at the end of last year

The Spanish economy accelerates growth and accumulates three consecutive quarters in positive after registering 0.4% at the end of March 2014. In year-on-year terms, GDP increased 0.5%, compared to the 0.2% decrease in the quarter above, which is the first positive rate since mid-2011. This consolidates the trend of progressive recovery of the Spanish economy.

By components, national demand showed an expansionary evolution in the first quarter, contributing 0.7 percentage points to the year-on-year change in GDP. This data occurs after fourteen quarters of negative contributions. Net external demand, for its part, subtracted 0.2 points from growth, after contributing 0.4 percentage points in the fourth quarter of 2013.

Among the components of national demand, and in quarter-on-quarter terms, the rate of advance of final consumption expenditure by households moderated slightly, one tenth, to 0.4%. Gross fixed capital formation fell 0.6%, after an increase of 0.7% in the last two quarters of last year. The weakening of investment in fixed capital is explained by the more contractive profile of investment in construction, which increased its rate of decline by 3.2 points, to 3.3%. On the contrary, the components of equipment and non-material fixed assets grew for the fifth and third consecutive quarter, respectively, the team accelerating seven tenths, up to 2.4%, and two points intangible fixed assets, up to 3.5% . On the other hand, the final consumption expenditure of the Public Administrations in volume increased by 4.4% in the quarterly rate, after decreasing by 3.9% in the previous quarter.

The negative contribution of net external demand to year-on-year GDP growth is explained by an increase in imports more pronounced than that of exports, with rates of 9.3% and 8.1%, respectively. These growths are 6.6 and 4.4 points higher than in the previous quarter. In quarter-on-quarter terms, imports grew again (1.5%), after the fall of the previous quarter (-0.6%), and exports exhibited a contracting behavior (-0.4%) after three quarters of progress in a row. In turn, the decrease in exports was derived from the decline in exports of goods (-1.7%), partially offset by the increase in services (2.7%).

From the supply perspective, the Gross Value Added (GVA) of the services sector grew in the first quarter of the year for the fourth consecutive quarter, 0.1% quarter-on-quarter, although at a slower pace than in the previous quarter (0.4 %). The GVA of the industry registered a negative variation of -0.5%, after stabilizing in the fourth quarter of 2013. The one of construction accentuated the intensity of the fall by more than two points, down to -2.6% quarter-on-quarter. The VAB for agriculture, for its part, registered a positive rate of 3.2%, similar to that of the previous quarter (3.3%).

The year-on-year rate of job destruction, in terms of full-time equivalent jobs, moderated in the first quarter of the year by 1.3 points, to -0.3%. In quarter-on-quarter terms, it grew 0.1%, as in the previous quarter, with the creation of 21,500 jobs. As a consequence of the evolution of GDP and employment, productivity per employed person decelerated seven tenths in the interannual rate, down to 0.8%. For its part, compensation per employee decreased 0.1%, after the 2.7% increase in the fourth quarter of last year, so that unit labor costs decreased 0.9%, compared to the increase in 1.2% from the previous quarter.

The year-on-year rate of the GDP deflator stood at -0.6% in the first quarter of 2014, eight tenths lower than that registered in the previous quarter and negative for the first time since mid-2012. This reduction was due both to the drop in the final consumption expenditure deflator, which decreased 0.1% after the 1.1% increase in the previous quarter, as well as the biggest drop in the export deflator (-2.7%, half a point more than between October and December last year). For its part, the deflator of gross fixed capital formation moderated the intensity of the decline by one tenth, to -2.3%, and that of imports intensified by nine tenths, down to -2.7%.

In the first quarter of the year, the Spanish economy presented a need for financing compared to the rest of the world of 7,057 million euros, 3,982 million euros higher than a year earlier. As a percentage of GDP, this represents a financing need of approximately 2.8%.

In short, the National Accounts data for the quarter of 2014 indicate the greatest boost to the economic recovery, with a new acceleration of quarter-on-quarter GDP growth and the recording of a positive annual rate, which is consistent with the Government's forecast for the set of the year. It also confirms that economic growth is generating employment, in terms of full-time equivalent positions. All this in an environment characterized by wage moderation, containment of unit labor costs and recovery of competitiveness vis-à-vis the exterior, with the consequent positive impact on exports. Finally, the growth pattern is more balanced, given the relative contributions of internal and external demand.

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