More good news for Spain economy: retail sales up for first time in three years

Retail sales have risen for the first time since 2010

They say good things come in threes. Well, Spain’s economy has now treated us to a triple helping of good news: after officially pulling out of recession and its property industry attracting new foreign investors, Reuters has now reported that Spanish retail sales rose in September for the first time in three years…

Although the official unemployment figure remains lodged above 25 per cent, recovering retail figures are a sure sign within the financial industry that things are looking up. For Spain, the growth is modest – just 2.2 per cent on a calendar-adjusted year-on-year basis – but after falling by 4.8 per cent in August, that is some rebound.

The data was released by Spain’s National Statistics Institute (INE) and while cause for cautious optimism, the increase should not be seen as a sign that Spain’s economy is inexorably on the right road to recovery. Not yet, at least.

“We’ve not seen a rise in retail sales for many years, but the comparison is with a month last year in which retail sales plummeted due to the sales tax rise,” Madrid-based Citi economist José Luis Martínez told Reuters.

“It’s a good figure, but we need to wait a couple of months before drawing any firmer conclusions.”

Before Spain’s economy emerged from its latest two-year recession last week, the country had enjoyed a boom in its export and tourism industry, helping the country’s wounded economy to grow by 0.1 per cent in the third quarter.

Tourism spend – still notoriously strong in September – is likely to have helped embellish these latest retail results. The next key indicator will, of course, be Christmas, with analysts divided over whether Spaniards will be tempted to splurge or save over a season that is traditionally the busiest time of the year for Spain’s retailers.