(Bloomberg) --
Europe's post-Covid success story is losing its luster after a sharp economic growth revision revealed consumption in Spain is much weaker than expected, according to JP Morgan Chase & Co.
Spain's official statistics agency shocked economists on Thursday when it revised the official growth print to 1.1% between April and June, down from the 2.8% pace previously estimated.
“From a regional perspective, Spain now looks very much an isolated laggard,” JPMorgan economist Marco Protopapa wrote in a research note. “This behavior is puzzling to us, and raises questions about how much signal to extract from this revision.”
Spanish recovery will likely be more gradual, said Protopapa, who cut his 2021 growth forecast to 4.5% from 6.3% after the revision showed that domestic consumption was more sluggish than previously expected.
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