U.S. News

Spanish Economy Grew 4% in Second Quarter

The Bank of Spain said Monday the country's gross domestic product grew around 4% in the second quarter, according to its latest estimates, compared to 4.1% in the first quarter.

In its July-August economic bulletin, the Spanish central bank said household consumption and investment in the construction sector is continuing to slow down. But to some extent this is offset by a smaller trade deficit and resilient investment in other areas of the economy, the bank said.

The National Statistics Institute plans to release its first estimate of second-quarter GDP growth on Aug. 14 and a more detailed breakdown of the data on Aug. 29.

The Bank of Spain said investment in construction, the main engine behind the country's longest-running economic boom in recent history, grew around 5% in the second quarter, amid a rapid slowdown in the growth of housing prices.

The bank said tax revenue appears to be growing well above expectations, despite tax cuts this year, and this should result in a 2007 budget surplus higher than the 1% anticipated by the government.