Spanish stocks and related country-specific exchange traded fund have been outperforming other core Eurozone markets as the economy picks up at its fastest clip in six years over the second quarter. However, growth could begin to slow.
The iShares MSCI Spain Capped ETF (NYSEArca: EWP) is up 8.1% year-to-date and has increased 44.7% over the past year.
The Bank of Spain announced that the country’s gross domestic product likely expanded 0.5% in the second quarter, up from 0.4% in the first quarter, reports David Roman for the Wall Street Journal. The WSJ calculates that the economy grew an annualized pace of 2% in the second quarter.
The central bank calculates that the economy could grow 1.3% in 2014 and 2% in 2015, up from earlier projections of 1.2% and 1.7%, respectively, reports Alen Mattich for the Wall Street Journal.
Economists argue that the elevated level of growth will make Spain the best or one of the best economic performers in the Eurozone for the quarter as reforms and a rebound effect helped lift the economy.
In contrast, Germany’s central bank said GDP stalled int he second quarter due to geopolitical concerns and a weakening construction sector while France’s central bank stated that the French economy grew 0.2% in the second quarter.
Year-to-date, the iShares MSCI Germany ETF (NYSEArca: EWG) is down 2.4% and iShares MSCI France ETF (NYSEArca: EWQ) is up 1.4%.