Spain avoids negative GDP
Spain narrowly escaped negative GDP with a very marginal 0.1% increase in GDP on the quarter in Q2 2008. This is up 1.8% from last year, but way below growth rates seen in Spain over the past decade.
The latest bulletin of the Bank of Spain confirms the havoc wreaked by the economic crisis in Spain, which has become accentuated in the second quarter with a slowdown in quarterly growth of 0.1% (previous quarter was 0.3%). The data also reduce the increase of GDP to 1.8%, a decline of nine-tenths.
This morning, the government’s chief economic advisor acknowledged that in the next few quarters economic growth will be “very close to zero,” while still dismissing that Spain is entering a recession. These statements occur barely one week since Pedro Solbes drastically cut growth forecasts for this year (1.6%) and for the next (1%).
–ABC, 30 Jun 2008 (my translation)
The Spanish government still refuses to admit that Spain is in recession, not unlike the U.S. government. Somehow they think this will trick people into believing something about the economy that’s not true.