The 0.9% q/q rise in Spain's GDP in Q1 lifted the annual growth rate from 2.0% to 2.6%, the fastest since Q1 2008. But GDP is still some 5% below its Q2 2008 level, and the disinflationary effects of this are clear in April's flash consumer prices figures, which showed headline CPI inflation remaining negative at -0.7%.
Elsewhere, the rise in euro-zone annual consumer price inflation from March's -0.1% to 0.0% in April was caused by a further slight fading of negative energy effects and a pick-up in food inflation. Hence it is too early to conclude that the threat of deflation has lifted altogether.
Meanwhile, the unemployment rate stuck at 11.3% for the third successive month in March. While the trend in unemployment still appears to be downwards, it is too slow to prompt any meaningful pick-up in wage pressures in the foreseeable future. (All data released on Thursday.)
