Spanish Economy Shows Promising Growth with Strong Domestic Demand

The Spanish economy has demonstrated notable growth, expanding by 0.8% in the second quarter—two tenths higher than the previous quarter and one tenth above preliminary estimates from the National Institute of Statistics (INE) released in late July. Year-on-year GDP growth reached 3.1%, a slight decrease of one tenth from the first quarter, although it remains three tenths higher than the figure reported last month. Domestic demand has been the primary driver of this quarterly GDP growth, contributing 0.8 percentage points between April and June. This upward trend is largely propelled by robust household consumption, which rose by 0.8% compared to the first quarter. The strength of the labor market and increased purchasing power have been vital factors, according to the Ministry of Economy, which emphasized that the latest data reinforces the dynamism of the Spanish economy. In light of these favorable second-quarter results, the government has revised its growth forecast for 2025 upwards to 2.7%, reaffirming Spain's position as a leader among advanced economies. The Ministry noted that quarterly GDP growth was chiefly motivated by domestic demand, linked to increased consumption and investment amidst global geopolitical and trade uncertainties. Specifically, final household consumption surged by 0.8% between April and June, while public administration consumption saw a modest rise of 0.1%. Investment also showed a substantial change, recording a growth of 1.8%. On a year-on-year basis, GDP growth of 3.1% was driven exclusively by domestic demand, which provided 3.5 percentage points to the growth, while external demand detracted half a point. Looking deeper into year-on-year metrics, household consumption increased by 3.1%, although this was three tenths lower than the growth seen in the preceding quarter, as household consumption decelerated by five tenths to 3.4%. In contrast, public spending grew by 2%, maintaining a rate similar to the previous quarter, while investment saw a robust year-on-year acceleration of eight tenths, reaching 5.8%. Today's statistics contain all current cyclical information available since July 29, the date of the advance data release for the second quarter. Additionally, this update incorporates revisions to gross figures from the first quarter of 2022 and aligns with the Annual National Accounts revision published on September 19, which adjusted GDP figures for 2024 and 2022 upward while revising down the 2023 projections. The INE also undertook a revision of seasonal adjustments and calendar models across the published series, ensuring the accuracy of these economic indicators. For the latest updates and news, follow El Huffpost through our mobile app available for both Android and iOS. Related Sources: • Source 1 • Source 2