Spain heads the rest of the euro zone pack with second quarter GDP figures at a time when we’re seeing glimmers of hope, with surveys suggesting the currency area could resume growth in the third quarter.
The Bank of Spain has forecast a 0.1 percent drop in GDP from the previous three months. It is usually close to the truth which supports the government’s claim that the economy is close to emerging from recession.
Last week, the Spanish unemployment rate fell for the first time in two years, although at 26 percent of the workforce it remains alarmingly high, and PMI readings have begun to pick up.
Other euro zone GDP reports are still a couple of weeks away.
Even if the economy only contracts by 0.1 percent, having shrunk by 0.5 percent in the first quarter, economists have warned that while the slump may be coming to an end, sustainable growth is a long way off. The central bank expects output to be flat over the next 12 months and says the economy remained very sensitive to adverse shocks, particularly on the fiscal side.
Nonetheless, even stagnation would be an improvement and there are signs of life elsewhere too. Italian consumer morale is picking up and retail sales have risen for the first time in 14 months. French consumer spending may be recovering (latest figures on that are due Thursday). But for the most parlously placed – Greece and Portugal – there is no such luck.