GDP created by economic activity in the A.C. of the Basque Country registered real growth of 4.1% in the second quarter of 2007, compared to the same period of 2006, according to EUSTAT data. This was the third quarter in a row to report an inter-annual rate of 4.1% and the good performance of the Basque economy is thrown into even greater relief by the context of stagnation seen in the Euro Zone.

This inter-annual growth rate betters that achieved by the Spanish economy by point one per cent (4.0%), that obtained by the Monetary Union-13 by one point six per cent (2.5%), that of the EU-27 by one point three per cent (2.8%) and that of the USA by two point two per cent (1.9%).

If we turn to the inter-quarterly evolution of GDP, by comparing the results of the first quarter of the year with those of the second, the second quarter advanced by 1.1%, point four per cent less than the previous quarter. In the Euro Zone it fell from 0.7% to 0.3% during the same period; in the EU-27 from 0.7% to 0.5%; in the Spanish economy, it fell from 1.1% to 0.8%, while the USA rose from 0.2% in the first quarter to 1.0% in the second.

Graph 1. GDP m/p. Inter-annual growth rates. (%)

Data corrected for seasonal and calendar effects.

Source: Quarterly Economic Accounts, Eustat. State Data: INE. EU-27, Euro Zone-13 and USA data: Eurostat.

The most outstanding supply sector in the second quarter as regards its inter-annual growth rate was the Primary Sector (9.7%), almost four points higher than in the first quarter (5.9%). However, its relative lack of weight in the overall economy meant that its contribution to total growth was slight.

The Industrial Sector maintained notable inter-annual growth of 4.6%, with the sub-sector of Capital Goods once more responsible for keeping this growth rate steady, buoyed up by the positive situation of the overseas sector, with exports overseas achieving a 13.4% inter-annual growth rate, almost doubling the rates reported in the first quarter of 2007.

Table 1. GDP m/p. Supply. Chain volume indices. Inter-annual growth rates. A.C. of the Basque Country

Data corrected for seasonal and calendar effects.

Source: Quarterly Economic Accounts. Eustat

Construction, which until recently, and over several quarters, had shown the highest growth rates, once more lost point one per cent in its inter-annual variation: the inter-annual figure of 4.4% in the first quarter became 4.3% in the second. In inter-quarterly terms, on the other hand, it rose from 0.4% to 1.2%.

Market Services lost point one per cent in inter-annual terms (3.8%), but gained a whole point in inter-quarterly terms, going from 0.5% in the previous quarter to 1.5% in the second of the year, showing greater evolution in market services related to inter-industrial activities than consumer-related services. Non-Market Services grew at an inter-annual rate of 3.1% and an inter-quarterly one of 0.9%, with the former gaining three tenths and the latter six tenths. Consequently, the inter-annual rate for Services as a whole remained unchanged (3.7%) from the previous quarter and improved on its inter-quarterly position, going from 0.5% to 1.3%.

From the perspective of Demand, it could be seen that the level of Internal Demand was maintained as regards previous quarters, advancing 4.5%. The evolution of its component parts was as follows:

Household Final Consumption Expenditure (Private Consumption), which represented 59.4% of GDP, decreased by two tenths in inter-annual terms in the second quarter (+3.7%) and was characterised by inter-quarterly deceleration from 2.5% in the previous quarter to 0.2% in the second quarter, a recurring feature of this quarter in recent years.

Public Administration Final Consumption Expenditure (Public Consumption) continued with the upward trend that began a year earlier, progressing at an inter-annual rate of 3.6% and an inter-quarterly one of 2.9% in the second quarter of the year. As a result of the evolution of private and public consumption, Final Consumption maintained the same level as in the previous quarter (3.7%), although in inter-quarterly terms a slight tapering off could be seen.

The other component of Internal Demand, Gross Formation of Capital (Investment), was once more the most dynamic factor of Internal Demand and showed inter-annual growth of 6.5%, one tenth less than in the previous quarter. This high, uninterrupted growth in investment leaned more than ever on the contribution of capital goods, which formed the basis for business trust in the future.

Table 2. GDP m/p. Demand. Chain volume indices. Inter-annual growth rates. A.C. of the Basque Country

Data corrected for seasonal and calendar effects.

Source: Quarterly Economic Accounts. Eustat

The number of Employed Personnel in the A.C. of the Basque Country showed an inter-annual increase of 2.4% in the second quarter of 2007, with the creation of more than 23,000 net jobs over the year and bringing total employment to over 997,000 jobs.

The inter-annual evolution of GDP in the three provinces of the A.C. of the Basque Country in the second quarter of 2007 showed some differences between their inter-annual rates as regards the second quarter of 2006. The highest growth in GDP took place in Bizkaia with 4.2%, followed by Gipuzkoa with 4.1% and in third place Álava, with growth in GDP of 3.7%.