Europe News

Spanish economy to outperform European growth, says Bankia CFO

Key Points
  • The International Monetary Fund forecasts a 3.1 percent GDP for this year
  • Unemployment numbers stood at 17.2 percent in the second quarter of 2017 - the lowest in more than eight years
Things are working 'reasonably well' in Spain: Bankia CFO

Spain's economy is heading in a "very good direction" and is set to grow more than the European Union, the CFO of the Spanish lender Bankia told CNBC on Thursday.

The retail bank beat analysts' expectations when reporting second quarter profits Wednesday of 210 million euros ($244 million). Analysts had forecast a net profit of 188 million euros. The recent economic recovery in Spain contributed to the bank's performance.

"GDP (gross domestic product) is going to grow this year probably above 3 percent, as much as 3.3 percent, and what's more important it's going to be 3 percent next year, so it's well-above the European Union level," Leopoldo Alvear, chief financial officer of Bankia, told CNBC Thursday.

"The micro in Spain is also working very well. We've seen this in consumption, we've seen this in the number of cars being sold, and we've seen of course in tourism," he noted.

The International Monetary Fund noted last week that Spain's economic recovery remains strong. The Fund estimated a 3.1 percent GDP rate for this year, benefiting from the economic reforms undertaken in the years after the 2008 crisis.

Not much space for further consolidation among Spain's big banks: Bankia CFO

"Thanks to past reforms, the economy has become more competitive, flexible and resilient. A dynamic services sector, much of which is export-oriented, has replaced an outsized construction sector, and together with a recovery in manufacturing contributed to the sustained improvements in the current account balance," the IMF said in an Article IV consultation report.

Data released Thursday morning showed unemployment numbers coming down once again. The rate stood at 17.2 percent in the second quarter of this year – the lowest in more than eight years.

However, the IMF warned that Madrid cannot stand still and there are further reforms needed to make the country less vulnerable to external shocks and avoid the fragmentation of society. "It is time to tackle the remaining vulnerabilities related to elevated public debt and complete the still-ongoing post-crisis banking sector adjustment," the Fund said in the report.

Follow CNBC International on Twitter and Facebook.