Spain emerged as the best performer of the eurozone’s big four economies last month as the single currency area largely shrugged off the impact of the Greek debt crisis. The latest health check conducted by the information services company Markit showed the pace of activity across the eurozone eased only slightly during the weeks when Greek banks were closed for business. But the survey found no signs that the eurozone was about to slide back into recession and, with Spain leading the way, was consistent with growth continuing at about 0.4% per quarter. However, the fragility of the recovery in the 19-nation group was highlighted by data from the EU’s statistical agency, Eurostat, showing a 0.6% drop in retail sales growth in June. The drop in spending was sharper than the financial markets had been expecting and cut the annual growth in retail sales from 2.6% to 1.2% – its slowest pace for nine months. Jack Allen, an economist at Capital Economics, said the decline in retail sales growth from 1% in the first quarter to 0.3% in the second quarter suggested that the boost to consumer spending from the collapse in oil prices late last year had started to fade....Spain’s return to growth is the result of the performance of its services sector, with the Markit survey showing output in recent months back to levels last seen when the economy was booming in 2006. The services PMI rose from 56.1 to 58.7 last month.
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