Spanish Economy Shows Resilience in Q2 as Growth Tops Estimates
Key Takeaways
- •Spain's preliminary Q2 GDP grew 0.7% quarter-on-quarter, exceeding the expected 0.6% and following a 0.6% rise in Q1.
- •Domestic demand was the primary driver of quarterly growth, contributing 0.6 percentage points to the headline figure.
- •Household consumption increased 0.7%, public administration spending rose 0.3%, and gross fixed capital formation advanced 0.5% during the quarter.
- •Spain has consistently outperformed the eurozone average, supported by strong tourism, a robust labor market, and record immigration expanding the workforce.
- •Annual GDP growth was estimated at 2.7% for Q2, maintaining the same pace for four consecutive quarters and underscoring Spain's position as a top-performing major eurozone economy.
Spanish economy shows added resilience in Q2 as growth tops estimates
Spain remained one of the brighter spots in the euro area in the second quarter, with preliminary GDP coming in stronger than expected, even as the broader currency bloc contended with tepid growth and lingering inflation pressures.
Preliminary Q2 GDP rose 0.7% quarter on quarter, compared with expectations for 0.6%, after a 0.6% increase in Q1.
Despite continued acceleration in inflation, the Spanish economy outperformed forecasts in Q2 as the growth conditions seen in the first quarter were largely sustained. Spain has consistently outpaced the eurozone average in recent quarters, helped by robust tourism demand, a strong labor market, and record immigration that has expanded the workforce and supported consumption.
Domestic demand was the main driver of quarterly growth, contributing 0.6 percentage points to the headline figure.
Within aggregate demand, household final consumption expenditure increased 0.7%, while spending by public administrations rose 0.3%. Gross fixed capital formation increased 0.5%.
Exports rose 0.8% on the quarter, while imports increased 0.6%. Both are expected to rebound by 1.4% and 1.5%, respectively, from Q1 at least.
Overall, the report points to a solid performance, with annual GDP in Q2 estimated at 2.7%. That reading has held steady over the last four quarters, reinforcing Spain's position as one of the euro area's fastest-growing major economies even as Germany and others struggle to regain momentum.