Is Spain ready to face another Recession?

It seems that the echoes of Spain’s Great Recession will never end. Despite the country’s strong growth for at least two years, the general feeling seems to be that of a country consumed by the resonance of its own misfortune.

Bond gains have yet to reach the ground, and the 10-year yield dropped below 1%. By contrast, IBEX 35 recorded losses by over 20%, in annual terms; a number that is not far away from European references.

Year-on-year GDP growth during the first quarter of this year was at 3.4%, only one decimal less than what it was during the last quarter of 2015. Similarly, employment remains at strong levels, as well. But, how has this political uncertainty impacted foreign investors’ entry into the economy of Spain?

What all of us already knew has now been confirmed: the Spanish government body came far from achieving the budget deficit goal for the close of 2015. Final figure have come in at 5.16% of GDP, compared to the 4.2% that they had promised to Brussels.

In the beginning, Spain’s bubble seemed to signal that the housing market could have high returns. This is because since the middle of the 1990s Spain displayed an incipient economic development, a complete industrial reconversion, a large supply of human capital at a reasonable cost (a good cost-to-productivity ratio), and at the same time entered the Euro project.

The positive macroeconomic data coming from the Spanish economy contrasts with the economic deceleration experienced by the global economy. During the second quarter of 2015, Spain’s real GDP continued to grow, exceeding 3%. The question is, Will Spain continue to experience economic growth in spite of sluggish global economic growth?