The Spanish economy grew 0.7% in the last twelve months

Madrid (ACN).- The Spanish economy has grown by 0.7% at the end of the second quarter compared with the same time last year, according to the Spanish Statistics Institute (INE). Although the figure confirms that there has been a slowdown in the pace of economic growth, which was predicted in early August by the Bank of Spain, it remains a positive sign. In quarterly terms, there has been a growth of 0.2%, as the Bank of Spain also predicted, one tenth less than in the first quarter.

These figures continue to highlight the positive contribution of foreign trade and export, since domestic demand continues to be low. The INE said that the slow down of the economic recovery, which started in the first quarter of 2010, has been caused by a reduction in private consumption.

Despite the good performance of exports, the economy has maintained its rate of recovery, passing from a quarterly growth of 0.3% in the first term, to 0.2% in the second one.

During the first quarter of 2011 the economy grew by 0.3% compared with fourth quarter in 2010, a year that ended with an annual growth rate of 0.8%. In mid-2011, the annual rate is 0.7%.

The figure published by the INE this Tuesday was in accordance with the forecast by the Bank of Spain, released on August 5^th. The Bank of Spain predicted “a weakening of the activity”, conditioned by the “worsening” of the sovereign debt crisis.

The Spanish financial regulator explained that the curb in economic activity during the second quarter should be viewed from the perspective of wider global issues. In particular, the perverse effects that the Japanese tsunami had, preventing the normal supply of equipment to the industrial sector, as well as the effects that were generated by the E. Coli bacterium outbreak which ended in with the "cucumber crisis" cooling the activity of the agri-food industry.

A detailed explanation of the behaviour of the Spanish economy during the second quarter of this year will be released on August 26^th, when the INE will publish data from the Quarterly National Accounts.