• External demand contributes 2.9 points and chains eleven quarters of positive contribution to GDP
  • Job destruction slows three tenths, to 1.3% compared to the previous quarter

According to the results of the National Quarterly Accounting (CNTR) published by the INE, GDP in volume, adjusted for calendar and seasonality, registered a quarterly rate of -0.5% in the first quarter. This drop is three tenths lower than that of the last quarter of last year. In year-on-year terms, GDP decreased by 2%, one tenth more than in the fourth quarter of 2012. In the euro area, quarter-on-quarter growth has also been negative (-0.2%) and less intense than in the previous quarter ( -0.6%), according to Eurostat.

Net external demand maintained a positive evolution, with a contribution of 2.9 percentage points to the year-on-year rate of GDP in the first quarter, a tenth higher than the previous period. The Spanish economy thus chains eleven consecutive quarters with a positive contribution from the foreign sector. In contrast, national demand decreased the interannual variation of GDP by 4.9 points, two tenths more than in the last quarter of 2012.

The positive contribution of net external demand to growth was a consequence of the acceleration of exports, which increased by 4.5% year-on-year, 1.3 points more than in the previous quarter. Imports for their part decreased by 5.1%, three tenths less than in the previous quarter.

In quarter-on-quarter terms, exports fell more sharply than the previous quarter, to 1.3%, due to the sharp decline in non-tourism services. On the other hand, imports moderated their fall rate by more than three points (-1.7%), largely as a consequence of the practical stabilization of goods imports.

The two main components of national demand, private consumption and gross fixed capital formation, improve their quarterly evolution. Household consumption, which fell by 1.9% in the fourth quarter of last year, fell by 0.4% in the first of 2013. Investment, which fell at rates of 3.9% from October to December 2012, registers a smaller decrease (-1.1%). On the contrary, the consumption of Public Administrations intensifies its quarter-on-quarter rate of decline by almost one point, to -1.2%, especially due to the reduction in purchases of goods and services.

Among the components of gross fixed capital formation, the upturn in investment in capital goods stands out, which grew by 0.2%, compared to the 5.4% drop in the previous quarter. Investment in intangible fixed assets also improves, increasing 4.5% after contracting 6% in the fourth quarter of 2012. Construction investment continued to decline from January to March (2.5% quarter-on-quarter), but at a slower pace.

All branches of activity presented negative quarter-on-quarter variations in their gross added value. Specifically, agriculture, livestock and fishing, of -0.9%; industry, -1.5%; construction, -0.7%; and services, -0.5%.

Regarding the nominal variables, the annual rate of the GDP deflator reached 0.9%, 1.1 points above that registered in the previous quarter. This increase is largely due to the acceleration of the consumption deflator, which grew 1.3%, eight tenths more than in the previous quarter. That of gross fixed capital formation, however, fell more sharply, to -2.8%, and that of exports decelerated 1.3 points, standing at 0.5%. That of imports, meanwhile, fell 0.7%, compared to the 2.1% increase in the fourth quarter of 2012.

The rate of job destruction slowed three tenths in quarter-on-quarter terms, down to -1.3%, and two tenths compared to a year ago, down to -4.5%. In the first quarter of the year, 761,200 jobs were destroyed. As a result, productivity per employed person slowed three tenths in the annual rate, to 2.6%. As remuneration per employee reduced its rate of decline from January to March by almost two and a half points, unit labor costs fell 3.2%, compared to 5.8% in the previous quarter. The business margin for the economy as a whole slowed its growth rate by one and a half points, to 4.1%.

The Spanish economy presented a financing need of 1,095 million euros in the first quarter of the year, compared to the financing capacity of the previous two quarters. In terms of nominal GDP, it represents a financing need of 0.4% of GDP, which represents a substantial correction compared to the financing need of 5.6% of GDP in the first quarter of 2012.

The data for the first quarter represents a turning point after reaching quarter-on-quarter GDP the lowest level in the fourth quarter of 2012. This slowdown in the rate of decline is observed in the two main components of national demand, private consumption and gross fixed capital formation, especially the increase in investment in equipment. Regarding exports, despite the quarter-on-quarter drop in services, goods rebounded, an improvement that will continue and intensify as the markets of our main trading partners stabilize. The year-on-year drop in unit labor costs will also allow us to continue to deepen the competitiveness of the Spanish economy. For the coming quarters, the trend of improving production data is expected to continue, ending the year in figures close to zero or positive, so that next year will be the year of the start of the economic recovery.



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