Spanish economy grows at fastest rate in seven years

THE Spanish economy grew at its fastest rate for seven years in the last quarter of 2014.

Gross Domestic Product (GDP) was up 0.7 per cent on the previous quarter and 2 per cent on the same period the previous year, according to the National Statistics Institute.

That means the economy has seen six consecutive quarters of growth and is now forecast to outpace the Eurozone average over 2015.

The figures are a boost to the country and beat the Bank of Spain’s estimates of 0.6 per cent and 1.9 per cent.

It is thought that households in Spain are taking advantage of lower prices to give the economy a fillip, with department store sales growing 6.9 per cent over the festive season as prices were held down. In Spain prices fell 1.5 per cent in January year on year, the biggest fall since 1997.

Analysts, though, have warned that Spain may face a deflationary trap with prices and wages being held down, so curtailing spending, but so far that has not happened.

Across the Eurozone prices fell 0.6 per cent in January compared to a year previously, mainly because of lower oil prices.