• The composition is more balanced, with positive input from the foreign sector for the first time after two years in negative
  • Employment grows for the third year and increases on average 2.9%, which represents the creation of almost half a million jobs

The Spanish economy maintained an average growth of 3.2% in 2016, the same rate as a year earlier, and almost double the average for the euro zone, according to the National Statistics Institute (INE). Three consecutive years of economic growth are chained together, one step away from recovering the level of income lost with the crisis. The composition of growth is more balanced as the contribution of domestic demand is moderated, while external demand contributes half a point to GDP growth, after two years in negative. Employment growth is maintained for a second year at rates close to 3% (2.9% on average in 2016), which translates into the creation of 481,668 full-time equivalent jobs.

National Accounting data for the end of 2016 shows that the Spanish economy maintains a strong growth rate, above 3% in the last two years. There are three exercises followed by positive rates, after five years of recession, which keep Spain with growth that almost doubles that of the euro zone as a whole (1.7%). It is also a more balanced growth model, since net external demand contributes half a point in 2016, after two years in negative. It is confirmed that the Spanish economy closed last year with a current account surplus for the fourth consecutive year, reaching 2% of GDP, a record of the historical series.

Domestic demand contributes 2.8 points to growth, although with a lower rate of progress due to the lower momentum of investment and public consumption. The investment nevertheless grows at an average annual rate (3.1%), very parallel to that of the whole of the economic activity. Highlights in this regard the strong push of investment in capital goods (5%) and, to a lesser extent (1.9%), of construction. Private consumption, on the other hand, shows a remarkable dynamism and accelerates four tenths, up to 3.2% annual growth, the same rate as the economy as a whole. The favorable evolution of consumption is a reflection of confidence in the Spanish economy and job creation.

Employment increases 2.9% on average annually, one tenth less than the previous year, which means the creation of almost half a million full-time equivalent jobs. Virtually all economic growth moves to employment, as has happened especially in the last two years. If this rhythm is maintained, the objective of recovering the total number of 20 million jobs at the end of the Legislature will be easily achieved. Job creation evolves almost parallel to the remuneration of total employees (3.2% in the year as a whole). It is also compatible with purchasing power gains in the remuneration per real employee (+ 0.2%), since in 2016 the average annual inflation was negative (-0.2%).

In the fourth quarter of 2016, the Spanish economy maintained the quarter-on-quarter growth rate at 0.7% compared to 0.4% for the euro zone as a whole. It is the same rate as the one recorded in the third quarter of last year, which indicates that the Spanish economy did not lose a pulse in the final months of the year just concluded. In the interannual rate, the fourth quarter registered a variation of 3%, compared to 3.2% in the previous quarter. 2017 starts with a still high cruise speed, which brings the objective of recovering as soon as possible the level of income that was lost with the crisis. Employment increased by 2.7% in the fourth quarter over the same period last year and 463,000 jobs were created in the last twelve months.

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