Spanish retail sales rebound in June, signaling an economic recovery

Retail sales in Spain rebounded during the month of June that signaled a sustained rebound in consumer spending that would lend support to underpin an economic recovery for the nation.

Spanish retail sales rose 5.6 percent y/y on a seasonally adjusted basis, largely driven by spending on clothes, shoes and household goods, data released by the National Statistics Institute (INE) showed Wednesday. However, analysts polled by Reuters had forecast a rise of 3.3 percent.

Spain has been embroiled in a political tangle, unable to form a majority government after national elections in December and June both delivered hung parliaments. The country’s consumer confidence indicators have been mixed in the recent months when surveys in other European countries including Germany are showing sentiment knocked by Britain's vote to leave the European Union.

Moreover, the central bank of Spain said earlier this week that a strong consumption is fuelling economic growth in the second quarter, when the economy grew 0.8 percent compared to the earlier quarter.

Meanwhile, economists have already warned that a longer period of vacancy in the political framework could hamper the country’s economic, financial and political conditions, raising concerns over delayed reforms in the job market and other measures aimed at fixing a gaping budget deficit, Reuters reported.