Spain advanced more strongly than expected in the second quarter of the year, improving GDP (Gross Domestic Product) by 0.5% quarter-on-quarter in that period compared to the 0.4% estimated until now. This same Tuesday, the Bank of Spain pointed to that growth figure in spring, and even showed the slowdown after the summer. For now, the data published by the INE insist on the dynamism of the economy’s activity, at least in what was the first half of the year.
With these data, the annual GDP advanced at a rate of 2.2% until the second quarter, which places Spain as one of the large economies that perform best during 2023 compared to the sluggishness of other partners, such as Germany, almost in recession. For the year as a whole, the supervisor’s estimate is for a 2.3% increase in GDP when estimating a weaker third and fourth quarter, which would compensate for the good start of the year.
Spanish consumption largely explains the rise in GDP in the second quarter. National demand contributed 2.3 percentage points to activity, one point more than in the previous quarter, despite the interest rate increases that are reducing family budgets; and even with inflation at its highest, which continues to reduce the purchasing power of households. Investment by companies also improved strongly, with a special impact on construction.
The branch that is losing steam and is being felt in the GDP is the foreign sector. Exports have been losing ground since the end of the year, largely due to the situation faced by other partners, especially the European ones. External demand subtracted one tenth, 2.9 points less than in the previous quarter. Exports fell by 3.2% quarterly and imports showed a contraction of 2.1%, compared to the advances of 4.6% and 4.1%, respectively, that they registered in the first quarter of the year. In fact, Spanish growth is increasingly lower compared to the previous year, when it exceeded 5.5%, which is already far away.
These data were reflected in the labor market with the creation of 576,000 more full-time jobs and growth that rose to 3% year-on-year. In addition, productivity per hour worked improved by 1.2% year-on-year.
Economic activity was boosted in the second quarter of the year by greater growth in consumption compared to the previous quarter, while investment, although it increased, did so to a lesser extent than in the first quarter. Exports and imports, for their part, entered negative rates in contrast to the advance they experienced between January and March.
Definitive exit from the crisis
The INE data published this Friday already incorporates different revisions that affect previous quarters. In fact, the institution has specified when Spain emerged from the crisis after updating its statistics: it was in the third quarter of 2022, a year ago now, when the level of GDP exceeded what it was four years before, at the end of 2019. , on the verge of the economic ‘shock’ caused by the pandemic.
With these latest updates, the Spanish economy is worth about 1.3 trillion euros, according to the INE. It is the highest figure in history and which, indirectly, allows the level of debt to be reduced by calculating public debt – which continues to grow in net terms – based on GDP.
The revision of economic data is spreading throughout Europe, as well as in Spain. Italy has been the last country to carry it out, adding 1.3 percentage points to its economic growth. Germany (0.6 points more), the United Kingdom (1.1 points), the Netherlands (1.3 points) and France also updated it, although in this case to reduce their GDP by 0.4 percentage points with respect to their first official estimate.
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