- Caresten Brzesk, chief economist at ING Diba AG
The Spanish economy accelerated for the eighth consecutive quarter, after it recovered from the recession in the third quarter of 2013. Spain's GDP in the second quarter rose at 1.0% quarter-over-quarter, in line with economist forecasts. On an annual basis, GDP advanced 3.1%, below analysts' expectation of 3.2%. Positive preliminary figure indicated that the economy has been sustaining its growth momentum seen in the beginning of the year, when GDP expanded 0.9%. Earlier in July, Spain's central bank revised its 2015 GDP forecast to 3.3%, while for 2016 to 3%. Despite the strong growth, several economists believe that this highly indebted economy might have peaked its growth rate, as household consumption is difficult to sustain over long period of time. Moreover, July flash CPI was flat at 0.0%, down from 0.1% in June. Sliding fuel prices increase disposable income, therefore boosting household consumption and helping Spain's economic recovery. In the meantime, Germany's unemployed data revealed that the number of unemployed rose by 9,000 in July to 2.8 million, the biggest monthly increase since March of 2014. However, the unemployment rate stayed in line with analysts' expectation at 6.4%, the lowest level since 1990. It was the first time in nine months when the number of unemployed surged in Europe's largest economy, as there were fewer jobs available. The rise in unemployment could be attributed to young people looking for jobs after finishing their study or training programs.
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