Spaniards not about to throw economic recovery out the window, Berenberg thinks

The recovery in Spain´s economy is on track and Spaniards are not about to throw it away.

Since mid-2013 Spain´s gross domestic product has been registering positive rates of growth, with non-performing loan ratios at the country´s banks now at 12.1% after having peaked at 13.6% in late 2013.

In parallel, Spain´s official rate of unemployment has eased to 23% from the 26.2% seen in 2013. Bringing unemployment down has long considered to be one of the keys to the country´s progress after the housing and construction bubble burst in 2008, leaving banks saddled with huge debts which Spaniards were increasingly unable to service.

However, while regional elections in any country are prone to 'protest votes' support for the Syriza look-alike Podemos party appears to have peaked, although it is still likely to do well, writes Berenberg bank´s chief economist Holger Schmieding.

It is no coincidence that support for Podemos has ebbed coinciding with the latest Greek elections.

“The economic disaster Tsipras&Co. Have inflicted on [Greece] so quickly without any positive outcome in sight may have made many Spaniards think twice about voting for a portest party with similar economic ideas,” Schmieding said in a research note e-mailed to clients.

Those unhappy with the recent corruption scandals of the incumbent centre-right and centre-left parties now seem t obe turning to the economically liberal Ciudadanos party. It looks set to become an important power broker.

This should ensure that come year-end Spain will still be governed by a pro-reform, pro-European government.