Centrum Stosunków Międzynarodowych - 24 August 2016: Spain’s economy forges ahead

Analysts stated that now the economy is forging ahead, despite that for month Spain been awash with warnings that the country’s long-lasting deadlock threatens to harm a fragile recovery.The state has been without a fully-functioning government for eight months with squabbling political parties unable to achieve any sort of pact following inconclusive polls in December, and again in June.Acting Prime Minister Mariano Rajoy, whose conservative Popular Party came first in both polls, though without an absolute majority, is negotiating to try to form a minority or coalition government.

On the economic movement, however, “there is little evidence that this is causing a significant impact”, says Miguel Cardoso, chief economist for Spain at BBVA Research, pointing to the strength of most indicators.
Last year, the economic system was one of the reasons most dynamic, growing 3.2%, and GDP has climbed for 12 straight quarters since Spain emerged from a serious crisis that broke out in 2008 when the property bubble burst. This course is being spurred by household spending, which will raise about 3% on-year in the second half of 2016, predicts Cardoso.

Spain’s economy – the fourth biggest in the Eurozone – has benefited from the policies of the European Central Bank (ECB), like many others.
The bank’s monthly purchase of public and private debt under a stimulus program is nurturing a climate of depressed interest rates for societies and the Spanish state, which is therefore keeping borrowing at historic lows.

“Rajoy is appropriating this politically, but this isn’t happening only in Spain,” says Jose Carlos Diez, economics professor at the Alcala University and a specialist in monetary policy.
“In Spain, the gist of the ECB’s intervention has been doubly more intense than in other nations,” he adds, given that the state is only just emerging from the dire straits of the crisis.
As for construction, the regime has cut investment in public works in the past few months as part of efforts to cut its deficit to a lower place the three percent bar set by the European Union.And time is of the essence, he warns, as Spain is vulnerable to whatever sort of external impact. “For this, we need a government that takes measures,” he states.