Spanish political uncertainties likely to weigh on investment in H1 2016

Spain's preliminary GDP grew by 0.8% q/q in the fourth quarter of 2015, in line with consensus, maintaining a similar pace seen in the third quarter. The Preliminary GDP's growth was driven by contribution from net exports and growth in domestic demand. Consumer confidence, increase in household disposable income and improved labour market conditions are seen supporting private consumption in the fourth quarter. Overall, Spanish GDP accelerated by 3.2%y/y in 2015, as compared to 1.4% y/y in 2014. Recovery in investments was likely supported by financial conditions. Accommodative monetary policy, cheap oil and increase in real wages are likely to remain strong in the forthcoming months.

"We forecast growth to slow slightly to 2.6% y/y in 2016."  said Barclays  "However, we expect increased political uncertainty and policy risks, stemming from the inconclusive December general elections and the Catalonian situation, to weigh on private investment in H1 2016"