Spanish Prime Minister Mariano Rajoy.

30-05-2015Susanna S

Government and consumer spending helped Spain’s economy power ahead in the first quarter, data showed, though evidence is also growing that the recovery has increased inequalities rather than reducing them as it has picked up pace.
The economy, and especially a labour market in which nearly one in four remains out of a job, will be a key battleground in a national election due in November.
Leaders of the governing centre-right People’s Party (PP) have said the recovery would gather pace and deliver around 600,000 more jobs this year.
But the PP suffered big losses in local elections on Sunday, with many voters opting for change in the shape of new parties - the market-friendly Ciudadanos  (’Citizens’) and anti-austerity Podemos (’We Can’).
Growing divisions between the haves and have-nots have fuelled the discontent, forming a potential longer-term drag on the turnaround as well as threatening to undermine Prime Minister Mariano Rajoy’s bid for a second term in office.
“A key electoral battle will be to address the current standard of living crisis,” Raj Badiani, an economist at IHS Global Insight, said in a note.
“The regional and municipal election results highlight the challenge of making the recovery more inclusive to pacify disgruntled voters, who have endured acute income and wealth losses during the crisis.”
Spain’s economy, which began emerging from a long recession in mid-2013, grew 0.9 percent between January and March, its fastest quarterly rate in more than seven years, National Statistics Institute INE said on Thursday, confirming preliminary readings.


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