The GDP of the A.C. of the Basque Country underwent an increase of 4.3% in the first quarter of 2006 with regard to the same period a year before, according to EUSTAT data. This inter-annual growth rate was point eight percent higher than that obtained by the state economy (3.5%) and practically doubled that reached by the EU-25 (2.2%) and the euro zone (2.0%).

The inter-quarterly increase for the first quarter of 2006 on the last quarter of 2005 showed a rate of 0.7%. This inter-quarterly rate was 0.8% for the state economy and 0.6% for the economies of the euro zone and the whole of the EU-25.

From the perspective of the supply sectors, we can see in this first quarter of the year a strong boost in Industry, which with an inter-annual rate of 5.6% appears as the most dynamic sector. Furthermore, it shows a positive inter-quarterly trend of 1.0% on the fourth quarter of 2005. The energy and capital goods sectors contributed above the average to achieve consolidation in the recovery of industrial activity observed since the second quarter in 2005.

The Construction sector, in line with the performance of previous quarters, continued to be an important contributor in this first quarter of the year with 5.5% inter-annual growth on the first quarter of 2005. The inter-annual rate fell one point in relation to the previous quarter, but the inter-annual evolution of 1.0% indicates and corroborates, for the moment, its strength.

Market services registered 3.5% inter-annual growth, point one less than the previous quarter. The inter-quarterly trend marks a slight slow down with regard to the last quarter of 2005, falling from an inter-quarterly rate of 1.2% at that time to 0.3% now. Non-market services presented a slight downward trend, both in inter-annual and inter-quarterly terms. The former fell by point five and the latter by point four.

The primary sector registered a 7.3% inter-annual decrease on the whole and a 5.0% fall if we compare the first quarter of 2006 with the fourth in 2005.

From the perspective of Demand, internal demand registered a growth rate of 4.2% in the first quarter of the year on the first quarter of 2005, boosting the inter-quarterly rate from 1.0% to 1.4%. Total exports achieved 9.2% inter-annual growth and total imports registered an increase that was point one percent lower, at 9.1%. Therefore, there was a less negative contribution by the foreign balance than a year before. We should point out that in this area the sharp recovery observed in the export of goods and services, which increased from a real growth rate of 4.5% in the fourth quarter of 2005 to a rate of 14.7%.

Expenditure on final consumption by households, private consumption, accelerated slightly on the previous rate. It grew 3.7% on the same period the previous year and 1.8% on the previous quarter. Both rates show an upward trend, surpassing the previous inter-annual rate by point two and improving on the preceding inter-quarterly rate by one point.

Public Administration Expenditure on final consumption, public consumption, with an inter-annual rate of 3.0% improved on the rates reached over the last eight quarters, but the inter-monthly variation fell from 0.3% to -0.1%.

As occurred over the previous quarters, the most active element in internal demand is once again the Gross formation of capital. Investment registered 5.7% real inter-annual growth, point one higher than the inter-annual rate for the previous quarter (5.6%) and showing a positive inter-quarterly rate of 1.3%, although lower than the 1.8% for the fourth quarter of 2005. Investment in building and public works, as well as investment in industrial capital goods, continues to mark a sustainable and slightly upward trend.

Employed personnel registered 2.2% growth in the first quarter of the year on the same period of the previous year. It also grew by 0.1% on the fourth quarter of 2005, reaching slightly over 960,000 employees in absolute figures. The highest inter-annual growth in personnel was produced in the Construction (4.8%) and Services sectors (3.3%); and grew 0.3% in the primary Sector, which was determinant in the evolution of total employed personnel with a 1.0% decrease in the industrial sector.

By provinces, inter-annual growth in GDP was higher than the Community average in Araba (4.6%) and Bizkaia (4.4%), while the rate in Gipuzkoa (3.9%) was point four below the average, although it was still higher than the State average (3.5%).