Experts see positive but minimal economic growth in third quarter

A panel of experts polled regularly by Spanish think-tank Funcas agree with the government that economic growth in Spain will turn positive, albeit minimally, in the third quarter after a prolonged recession.

Funcas said the consensus forecast, as measured by the arithmetic average of the forecasts of the 19 experts consulted, is for GDP to rise 0.1 percent on a quarterly basis in the period July-September, compared with a decline of 0.1 percent the previous three months and a previous forecast for the third quarter of zero growth. A pattern of modest growth is expected over the coming quarters.

The panel now expects output to shrink by 1.3 percent this year, compared with an earlier forecast of 1.5 percent.

The experts maintained their forecast for GDP growth for 2014 of 0.7 percent, but with a different composition. The contribution of domestic demand will be less negative, while the contribution of the export sector will remain positive but to a lesser extent than previously estimated.

However, growth of 0.7 percent next year will be insufficient to create jobs, with the Funcas panel predicting a fall in employment of 0.2 percent after a decline of 3.2 percent this year. The experts also revised their forecasts for the jobless rate to 26.5 percent this year and 25.9 percent for 2014.

Consumer spending is expected to remain weak for the rest of this year contracting by 0.1 percent in both the third and fourth quarters, improving to growth of 0.2 percent in the third quarter of next year.

The experts increased their forecasts in both cases by 0.2 percentage points for the public deficit for this year to 6.7 percent in 2013 and 5.9 percent in 2014.