The Spanish economy grows by 0.4% in the second quarter, a tenth less than in the first three months of the year

2023-07-28 10:15:25

The Spanish economy grew by 0.4% between April and June 2023, one tenth less than the previous quarter. This was confirmed this Friday by the National Institute of Statistics (INE). This is a slightly less intense growth than the one recorded between January and March (0.5%), when a slowdown in the economy was noted due to the effects of inflation. In this quarter, there has been a boost in investment and household consumption, but, on the other hand, there has been a export brake. Thus, the interannual variation of the Gross Domestic Product (GDP) slowed to grow at a rate of 1.8%, almost two and a half points below that recorded between January and March (4.2%) .

This is the first time since the end of the state of alarm that the GDP indicator growing below 2% compared to the same period of the previous year. Precisely, in the second quarter of 2022, the conflict broke out in Ukraine, which aggravated the inflationary pressures which had already begun to be noticed with the covid crisis.

The first half of 2023 has been marked by this context of high inflation which has led central banks to raise interest rates.

Inflation rises four tenths in July and stands at 2.3%, while the underlying rises to 6.2%

In this context, the economy has noticed the boost in domestic demand, which grew by 1.9% in the second quarter thanks to the improvement of construction investment, equipment and household consumption. Specifically, domestic consumption contributed 1.5 points to GDP growth in 2022, i.e. one tenth more than in the first quarter of 2022,

After the setback in the first quarter, household consumption has recovered with a growth of 1.6%, three points above the previous record. The final consumption expenditure of public administrations also grew (+1.5%), more than two points above the previous three months. Gross capital formation also climbed two points to rise by 3% quarter-on-quarter.

Compared to last year, i.e. year-on-year rates, household final consumption expenditure rose 0.5% and from public administrations 3.8%.

On the other hand, in these three months the contribution of the foreign sector has sunk to contribute 0.3 points, 2.5 less than between January and March. The foreign sector has registered a change in trend, after boosting activity in recent quarters. Therefore, exports have seen a slowdown of 9.5 points between April and June, a period in which they have grown by 0.7% year-on-year. This slowdown is caused by the decline in exports of goods (-8.8 points) and services (-11.9 points), while the expenditure of non-residents has also fallen (-17.7 points).

Imports grew by 0.2%, more than three points below the previous quarter.

The INE has also revised last year’s growth data, modifying two of the quarters: the first of all with two tenths less (it remains, therefore, with a negative growth of -0.6%) and the second with three more (2.8%). The third and fourth have remained with growth of 0.4%.

In relation to the labor market, the National Accounts statistics indicate that the number of hours worked increased by 1.3% of hours worked compared to the previous quarter, 1.2 points more than the first three months of the year. On the other hand, annual growth has been five tenths below (+0.6%) that recorded in the first quarter.

The statistic published this Friday is an advance, which must be confirmed once all the indicators are known next September 22.