Headway is most visible in our improved competitiveness, and more incipient in the recomposition of the contribution of domestic demand to activity, or in the reallocation of productive and financial resources towards industries with higher growth potential. The Spanish economy grew slightly in the third quarter – the first rise in output since the opening quarter of 2011 – amid a somewhat more favourable external setting, and with financial tensions lifting and confidence indicators improving. As in the rest of the euro area, the coming quarters will foreseeably see a prolongation of the path of gradual recovery, which is expected in its initial phases to continue to be driven by the external sector. In recent quarters, net external demand has played a key role in sustaining activity, owing to the sound export performance, the weakness of imports and the highly favourable tourism figures. Moreover, the decline in private domestic demand is being checked as a result of the rise in investment in equipment and of the stabilising of private consumption. The adjustment in competitiveness, in its various different strands, is playing a central role. In Spain, this has been done through what is known as “internal devaluation”, the direct containment of costs and margins, not through the nominal depreciation mechanism, which  BIS central bankers’ speeches  3  was the normal device prior to our joining the monetary union. Internal devaluation is, evidently, more complicated and slower than nominal depreciation; but, in turn, the gains to be had are more durable.
The net percentages for the questions related to the factors are defined as the difference between the percentage of banks reporting that the given factor contributed to a tightening and to an easing.