MADRID – According to revised figures released last Monday, the Spanish economy failed to meet the expectations that were set in 2010 and 2011. This suggests that the country may have more difficulty getting out of threatening recession.
Amid the second recession in the Spanish economy, the statistics institute said the country’s GDP only grew 0.4% in 2011. That is .3% less than the annual rate of 0.7% originally announced last February.
“I was shocked at this review as it is a significantly relative decline,” said Santiago Sanchez Guiu, the economy coordinator of the Instituto Flores de Lemus Carlos III University.
However, analysts say that there is no reason to be alarmed yet as preliminary expectations are usually higher than the actual outcome.
“When the economy is more or less stable, the discrepancies between the preliminary and the latter are usually minimal. But in times of turmoil, the difference will be very irratic.” said one analyst.
The National Statistics Institute also cut the 2010 annual GDP to -0.3%, while the rates remained unchanged in the years 2008 and 2009 to -3.7% and 0.9%, respectively.
The INE revised its growth figures in August, shortly before the release of quarterly national accounts for the second quarter.
The statistical office disseminated GDP figures for the second quarter of this year last Tuesday. The preliminary reports showed a quarterly contraction of 0.4% and an annual fall of 1.0% compared to the previous quarter which showed -0.3% and -0.4%, respectively.
No Impact on the Deficit
Experts said the downward revision of the growth figure of 2011 will have no impact on the deficit because it is of different natures and magnitudes. Therefore, they are not comparable.
“The growth figures are based on an estimate, while the deficit statistic is based on actual figures of income and expenditure,” said Sanchez Guiu.
However, some analysts said the evolution of the deficit can be concluded based on the behavior of the growth figures.
“The upward revision made by the Government deficit of 2011 to 8.9% of GDP has been more consistent with this downward revision of the GDP growth than the 0.7% that was announced by the INE,” added the analyst.