Spanish economy fails to grow in third quarter

Spanish GDP remained flat in the third quarter of the year, official figures show.

Data released by the National Statistics Institute (NSI) revealed the economy failed to expand during the July-September period, recording a 0% growth rate following two successive quarters of growth.

The news is unlikely to reassure investors, who are already wary of Spain’s high levels of debt and growing unemployment, and could raise fears of the nation’s economy following those of Greece, Portugal and Ireland.

According to the NSI, “this result includes a lesser contribution of domestic demand than has been estimated in previous quarters”, which offset the benefits of increased global economic activity. (article continues below)

Spain exited recession earlier this year, when it recorded GDP growth of 0.1% in the first quarter and 0.2% in the second.

However, at the start of November, the Bank of Spain predicted that economic activity would have weakened in the third quarter, noting the tailing off of expansionary factors, such as the public aid programme for car purchases, during the period.