Spain’s quarterly growth slows to 0.2%, missing expectations

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Tourists walk along a shopping street in central Malaga

MADRID (Reuters) -Spain’s economic growth slowed down sharply to 0.2% in the third quarter from the previous three-month period when gross domestic product expanded 1.5%, slightly missing expectations, flash data from the National Statistics Institute showed on Friday.

The economy was held back by a fall in investment, reflected especially in slowing construction, which, however, could not offset a strong performance of the services sector driven by a brisk tourist season.

Private consumption still grew 1.1% in the quarter, resisting high inflation recorded during the summer months, when it was above 10%.

The INE said separately on Friday Spain’s consumer prices in the 12-month period to October rose 7.3%, a slower pace than 8.9% in September and the lowest reading since January.

Analysts polled by Reuters had expected GDP to grow 0.3% quarter-on-quarter.

On an annual basis, Spain’s third-quarter economic output expanded by 3.8%, compared to a Reuters poll of 3.9%. In the second quarter, annual growth totalled 6.8%.

The government has said Spain will not enter recession in the coming quarters, as it pins it hopes on the resilience of the labour market.

(Reporting by Joanna Jonczyk-Gwizdala and Belen Carreno, writing by Andrei Khalip)