Spanish economy exceeds forecasts, record 2.9% YoY growth in Q2

The Spanish economy recorded a faster-than-expected growth rate of 2.9 per cent year-on-year in the second quarter, outpacing other major eurozone economies.

The National Statistics Institute (INe) reported on Tuesday that GDP rose by 0.8 per cent compared to the previous quarter, surpassing analysts’ expectations of a 0.5 per cent quarterly increase and a 2.5 per cent annual rise.

This robust performance led the Spanish government to revise its growth forecast for 2024, increasing it from 2 per cent to 2.4 per cent. The country’s strong economic expansion contrasts with France’s modest 0.3 per cent growth and Germany’s meagre 0.2 per cent growth in the same period.

The growth was driven by increased exports and strong domestic demand, consumption, and investment. Industrial activity showed significant improvement, contributing to the upward trend across all sectors.

Employment figures also supported the positive outlook, with the unemployment rate dropping to 11.27 per cent, the lowest since the 2008 recession.

Despite the rapid growth, the economy is not overheating, as inflation fell to 2.9 per cent in July, down 0.7 percentage points from the previous month. The decline in electricity and food prices contributed to the inflation slowdown.

Spain’s economic resilience positions it to outperform its eurozone peers this year, reflecting a strong recovery trajectory amidst broader European economic challenges.

Attribution: Reuters & The National Statistics Institute