The Spanish economy ended last year with an unprecedented acceleration that will cement its position as one of Europe’s top producers. The country’s gross domestic product reported a 0.5% growth in the fourth quarter of 2019. The services sector performed very strongly and exports increased during the period, according to a report by the National Statistics Bureau of Spain.

Despite the surprising acceleration in the fourth quarter, Spain’s overall economic growth is declining. The Spanish economy registered a growth of 2% in 2019, data show on Friday. This is the slowest growth rate for the country since 2014.

Spain begins the new year with a new left-wing coalition government. The appointment earlier this month of Socialist Party leader Pedro Sanchez as Prime Minister and Podemos Left Party leader Pablo Iglesias Turrion as his deputy put an end to political insecurity for the country.

But the new administration also comes with its own set of uncertainties about economic policies. This is the first coalition government in Spain’s recent history and it is not yet clear what it will have to offer.

So far, it has raised the national minimum wage by 6%, its second increase in the last two years. Economists say there is initial evidence that last year’s increase has somewhat slowed job growth in 2019, and that the extra margin could cause further turmoil.

The country’s leadership said it wants to continue raising its minimum wage every year in an effort to boost economic growth. Economists have warned, however, that the increase should not exceed productivity growth, which is relatively low in Spain.

“More employees are driving the growth of the economy”, said the Bloomberg Intelligence economist Maeva Cousin. “But this model cannot be maintained, and Spain faces a difficult transition to a more sustainable source of expansion: productivity”, added she.

Talks are also underway to resolve the political conflict with Catalonia. Prime Minister Pedro Sanchez has decided to postpone talks until after the planned autonomous elections, according to the Spanish government. The vote itself is expected to be held by the end of May at the earliest.