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August 26, 2016

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Consumer spending lifts Spain’s GDP

SPAIN’S economy grew strongly in the second quarter as consumer spending stayed robust and demand for exports rose, though there were signs that a vibrant investment climate may be starting to cool after months of political uncertainty.

An economic recovery has retained momentum through eight months without a functioning government, as the country has continued to notch up one of the fastest growth rates in the eurozone this year.

Quarterly GDP growth hit 0.8 percent, keeping pace with the first quarter and up a tenth of a percentage point from a preliminary estimate, yesterday's final data from national statistics agency INE showed.

Consumer spending grew 3.6 percent year on year as people who kept their jobs through a recession that ended in 2013 took advantage of better times to buy big-ticket goods like washing machines.

Exports of services also performed well, INE said, even outside the tourism sector which has been boosted by record numbers of visitors this summer.

Spain’s acting economy minister, Luis de Guindos, said he expected the economy would eventually be impacted by the lack of a government.

However “from what we can tell there is no slowdown in the third quarter, it will be similar to the second and first,” he told reporters.

After two inconclusive national elections in December and June, the specter of a third looms.

Politicians last week inched closer to ending the impasse when the People's Party of acting Prime Minister Mariano Rajoy agreed terms to negotiate a pact with a smaller rival, Ciudadanos.


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