Spanish Economy Grows By 3.8%

Nov. 22, 2006
Industrial production grew by 3.9% in the third quarter.

Slightly higher than the second-quarter figure of 3.7%, the Spanish economy grew by 3.8% in the third quarter on a 12-month comparison, according to the National Statistical Institute (INE). The rise was the highest quarterly figure since a 3.9% rise in the fourth quarter of 2001.

Industrial production grew by 3.9% in the third quarter on a 12-month basis, while the booming construction sector raced ahead by 5.7%. Overall, Spanish growth continued to outstrip that of the eurozone overall, which was 2.6% in the third quarter.

GDP rose by 0.9% in the three months from July to September from the second quarter of the year. On Nov. 21, the government revised growth forecasts for the year as a whole from 3.4% to 3.8%, while estimating that it would ease to 3.3% in 2007.

Despite Spain's strong track record in recent years, analysts and financial institutions including the Bank of Spain have voiced doubts as to whether such levels can be sustained since it has been underpinned by construction, and consumption by ever more indebted households.

Copyright Agence France-Presse, 2006

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