Spanish Economy Shows Steady Growth Amidst Challenges
The Spanish economy displayed resilience with a growth of 0.8% in the third quarter of the year, mirroring the growth rate of the previous quarter. This steady performance was primarily driven by a notable increase in public spending, which surged at a quarterly rate of 2.5%, marking the highest rate since 1995.
Household consumption also contributed positively, rising by 1.2%, which is one-tenth higher than the previous quarter, as reported by the National Institute of Statistics (INE). Year-on-year, the Gross Domestic Product (GDP) experienced a rise of 3.3%, slightly above the previous quarter’s performance, although it fell short of October's expectations of a 3.4% growth rate. Nonetheless, this marks the highest year-on-year growth since the first quarter of 2023.
The Ministry of Economy highlighted that these results underscore the dynamism of the Spanish economy, positioning it as a leader in growth among the major economies of the European Union.
The third quarter marks an impressive streak for the Spanish economy, with 17 consecutive quarters of growth on a quarterly basis and 14 quarters of year-on-year gains. The data reveals that domestic demand was a significant contributor to the year-on-year growth of GDP, accounting for 2.8 percentage points, while external demand contributed only half a point.
It is important to note that the quarterly growth of 0.8% was entirely supported by domestic demand, which provided a one-point contribution. In contrast, the external sector detracted by two-tenths from the growth overall.
While household consumption and public expenditures showed positive trends, investment by public administration saw a decline of 1.3% in the third quarter. This downturn is noteworthy, as it marks a return to negative territory following three quarters of increases, primarily driven by a significant 18% drop in housing investment compared to the preceding quarter.
In summary, despite facing hurdles in public investment and external demand, the Spanish economy continues to demonstrate strong household consumption and public spending, paving the way for ongoing growth as it enters 2024.
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