Spain Q2 data signals annualised growth of more than 4%

Spain's private consumption continues to be a key driver to its growth. PMIs, retail sales and, more important, improving labour market conditions, also signal vigorous consumption growth of 0.8% q/q. 

The most recent labour data on social security affiliations and registered unemployment are consistent with higher growth in Q2 relative to Q1. Wages are also increasing. In Q2, company and trade union representatives signed a new agreement for wages (for all sectors) to increase by up to 1% this year and by up to 1.5% in 2016.

According to Barclays,

• The outlook for H2 15 and 2016 remains positive, even if the quarterly growth profile is likely to decelerate slightly relative to H1 15. 
• The deceleration is set to be felt mainly by end-2015 and in early 2016 as uncertainty about the general election is likely to curb both private consumption and investment.
• In 2016, improving disposable income and financing conditions, as well as further recovery in the labour market.
• Net exports to contribute positively as key trading partners experience slightly better growth prospects, sustaining and possibly slightly improving the market share of Spanish exports.
• All in all, relatively strong growth of 2.7% is expected in 2016.