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

According to the results of the National Quarterly Accounting (CNTR) published by the INE, the GDP in volume, corrected for calendar and seasonality, recorded a quarter-to-quarter rate of -0.5% in the first quarter. This fall is three tenths lower than 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 zone, quarter-on-quarter growth has also been negative (-0.2%) and of lower intensity 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 at the annual 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. On the contrary, the national demand reduced the annual 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 4.5% year-on-year, 1.3 points more than in the previous quarter. Imports on the other hand decreased 5.1%, three tenths less than in the previous quarter.

In inter-quarterly terms, exports declined more intensely than the previous quarter, up to 1.3%, due to the sharp decline in non-tourist services. On the other hand, imports moderated more than three points their rate of fall (-1.7%), largely as a result of the practical stabilization of imports of goods.

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

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

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

As for the nominal variables, the annual rate of the GDP deflator reaches 0.9%, 1.1 points higher than the one recorded in the previous quarter. This increase is due, to a large extent, 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 with greater intensity, to -2.8% and that of exports slowed 1.3 points, standing at 0.5%. That of imports, on the other hand, fell 0.7%, compared to the increase of 2.1% in the fourth quarter of 2012.

The rate of job destruction moderated three tenths in quarter-on-quarter terms, to -1.3%, and two tenths compared to a year ago, to -4.5%. 761,200 jobs have been destroyed in the first quarter of the year. Consequently, productivity per employee slowed down three tenths at an annual rate, up to 2.6%. As salary compensation reduced almost two and a half points its rate of decline from January to March, 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, 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 implies a need for financing of 0.4% of GDP, which represents a substantial correction compared to the need for financing of 5.6% of GDP in the first quarter of 2012.

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

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