- Spain Q3 preliminary GDP +0.6% vs +0.6% q/q expected
- Prior +0.7%
- Spain Q3 preliminary GDP +2.7% vs +2.7% y/y expected
- Prior +2.6%
It is the preliminary report, so there aren’t much details to work with here besides the headline figures above.
The quarterly figure does show a bit of a slowdown in Spanish economic growth in the third quarter, albeit marginally. And among the bigger names in the euro area, Spain is still very much punching above its weight in carrying the more optimistic banner for the region.
The only issue is that inflation pressures in Spain is also starting to get out of hand. Headline annual inflation is bordering on 5% in October with core annual inflation holding above 3%. Those numbers are way beyond what the ECB would be comfortable with, running above their 2% price target.
The Spanish GDP report here isn’t something to spook markets. But a mild slowdown if coupled with troubling performances in France and perhaps Germany later, that could really ramp up talk of stagflation risks in the euro area especially when paired with the inflation numbers today.
Traders might still lean more favourably on inflation risks prompting the ECB to act in December. But if growth conditions continue to suffer, it might only be a matter of time before the narrative shifts and the focus turns to stagflation risks instead. So, just be wary of that.
This article was written by Justin Low at investinglive.com.