The GDP generated by the economy of the A.C. of the Basque Country registered 4.2% real inter-annual growth in the fourth quarter of 2005, with regard to the same period a year before, according to EUSTAT data. This inter-annual growth rate is point seven higher than the rate reached by the Spanish economy (3.5%), and one point higher than growth in the USA economy (3.1%) and over two percentage points above the estimated rate for the EU-25 (1.8%).

Inter-quarterly growth for the fourth quarter on the third of 2005 came to 0.8%. This inter-quarterly evolution was 0.9% for the Spanish economy, 0.3% for the USA economy and 0.4% for the whole of the EU-25.

From the Supply viewpoint, once again, there was an outstanding boost from construction in the fourth quarter of 2005. With an inter-annual rate of 6.5% it is still the most dynamic sector, above the average for the GDP, and over half a percentage point above the inter-annual rates registered over previous quarters. In this sense, the inter-quarterly evolution for the fourth quarter on the third also showed 1.8% growth.

But the architect of growth in GDP, from the supply point of view, was the industrial sector in the fourth quarter, which registered 4.1% inter-annual growth, significantly higher than the inter-annual rates for previous quarters (1.3% in the first, 2.5% in the second and 2.8% in the third), although there was a slight 0.3% downturn in inter-quarterly terms.

Market services reached 3.6% inter-annual growth, the same rate as obtained the previous quarter. However, the inter-quarterly trend shows a 1.2% progression, compared to 0.6% for the previous quarterly period. Non-market services presented a slight upward trend both in inter-annual and inter-quarterly terms. The inter-annual rate was 2.1% and the inter-quarterly was 0.6%, a tenth above the rates for the preceding quarter.

The primary sector obtained a 2.1% positive inter-annual rate, above the 0.8% for the third quarter, but, on the other hand, in inter-quarterly terms there was a slight 1.9% downturn with regard to the third quarter of 2005.

From the Demand viewpoint, inter-annual growth in GDP continued to be sustained by Internal demand basically, which in the fourth quarter had obtained a 3.9% inter-annual rate and that, in addition, was accompanied by a less negative contribution from the foreign balance than a year before, in the fourth quarter of 2004. Total exports obtained 4.0% inter-annual growth and total imports registered a 3.6% increase on the same period the year before.

Expenditure on final household consumption, private consumption, showed a slight acceleration on the previous quarter. It grew 3.5% in comparison with the fourth quarter of 2004 and 0.7% on the third quarter of 2005. Both rates mark a slight acceleratioin, surpassing the rates registered the previous quarter by two tenths and one tenth.

In addition, Expenditure on final consumption of Public Administrations, public consumption, reached 2.4% inter-annual growth, but the inter-quarterly variation fell from 1.1% to 0.3%.

Over the four quarters of 2005 the most active component of Internal demand was once again Gross capital formation, i.e., investment. Growth was maintained over the four quarters of the year, with inter-annual growth rates above 5%, reaching the maximum rate of 5.6% in the fourth. It also showed a positive inter-quarterly trend in the fourth quarter, with a positive variation of 1.8% on the previous quarter. This acceleration in investment is due to the trend in Construction and the acquisition of industrial capital goods.

Personnel employed increased by 2.5% in the fourth quarter on the same period the previous year, and also increased by 0.6% on the previous quarter (third) of 2005. The sectors of Construction (+6.1%), Primary (+3.6%) and Services (+3.4%) made positive contributions to the net creation of inter-annual employment, while the industrical sector registered a 1.1% decrease.

With regard to the evolution of GDP by provinces in the fourth quarter of 2005, Álava stood out with an inter-annual rate of 5.5%, while Guipúzcoa (4.0%) and Bizkaia (3.9%) grew below the Basque average, but all grew above the average for the State.

2005 Annual Balance of the Basque economy

The GDP of the A.C. of the Basque Country grew by 3.7% in 2005 and was three tenths higher than the rate obtained by the Spanish economy (3.4%) and over two points higher than the rate reached by the Euro Zone (1.3%) and the EU-25 (1.6%).

The highest sectorial growth was generated by Construction (6.0%), and there was also a high contribution by the primary sector (5.8%).

Industry (2.7%), despite the effort made in the last quarter of the year, was one point below the GDP (3.7%), although its position improved by two tenths on the year before (2.5%).

Market services mantained a good trend, with an annual growth rate of 3.4%, but Non-market services were below this trend, with a rate of 2.1%.

Internal demand is what sustained GDP growth over the whole of 2005, with 3.7% growth, an identical rate to GDP. The most dynamic factor in internal demand was Gross capital formation with 5.3% growth, much higher than final consumption, which came to 3.1%.

Within final consumption, it was households (private consumption), with continual growth over the whole of 2005, that sustained most of this growth, presenting an annual rate of 3.3% for 2005, while the irregular trend in expenditure of the Public Administrations left growth in public consumption at 2.4%.

With regard to the foreign balance, growth rates for exports and imports fell considerably with regard to the previous year, falling from 8.3% to 2.7% in the case of exports and from 8.4% to 2.8% for imports.

As far as the trend in GDP by provinces is concerned, we should point out that in 2005 both the GDPs of Bizkaia and Gipuzkoa experienced annual growth of 3.6%, one and a half points respectively higher than in 2004, while Álava, as the province with the highest rate in 2005 (3.9%), showed a lower pace of growth to that of the preceding year (5.6%).