Spain: The sun rises every morning, which is no mean feat

​Real GDP grew by +0.7% q/q and +3% y/y in Q4 2016. Production echoed 2015 although it was below the average +3.9% recorded in the decade preceding the global financial crisis. Private consumption and exports are once more considered the engines of growth, despite a moderate deceleration. Public consumption, investment, and imports are expected to change on a similar scale as in 2016. 

Rebalancing has led to a much healthier composition of GDP. The share of construction increased from 16% to 22% between 1998 and 2007, before the housing bubble burst in 2008, resulting in construction to shrink by -38% until 2013. Collaterally, the aftermath of the housing bubble shrank tax collection by -EUR70.7bn between 2007 and 2009 and revenues are still -EUR28.7bn below the 2007 peak. Meanwhile, the share of exports in GDP increased from 23% to 32% between 2010 and 2016. Combined with the decline in imports, this has enabled Spain to benefit from a surplus in the trade balance.