The INE confirmed that the economy once again surprised positively with growth of 0.8% in the second quarter, compared to the previous quarter. The increase in GDP (Gross Domestic Product) is equal to that of the first quarter – where it also surprised up with 0.9% – and continues to be the most notable among the main partners of the euro zone. During the same period, the common GDP of the eurozone partners remained virtually stagnant, with particular weakness in Germany.
Forecasts from the government and most institutions and analysis centers indicate that our country’s economic activity will grow by 2.8% for the whole year, four times more than that of the region. euro as a whole.
This strength is supported by the recent corrections of the national accounts of the INE and by the better than expected performance of family consumption, business investment and, above all, the external sector, and specifically tourism, which is extending its “attraction” since the end of the pandemic began in 2021.
“I understand that the headline ‘Spain quadruples Eurozone growth’ is very soft, but what is relevant in this case is that Germany and by extension the Eurozone are growing at penalty (respectively 0.1% and 0.7%). And that should worry us,” observes economist Daniel Fuentes.
Year-on-year, GDP grew by 3.1% in the second quarter, compared to 2.6% in the previous quarter. “The positive contribution of private consumption stands out, with growth of 2.9% over one year, driven by gains in purchasing power and changes in employment. Likewise, investments are accelerating, with growth of 2.2% last year, and exports are also improving, with growth of 2.6%, reflecting the competitiveness of Spanish companies,” analyzes the ministry. of the Economy.
“All branches of activity show positive growth during the first months of the year, highlighting the growth of the manufacturing industry, with an increase of 5.2% last year,” continues du department headed by Carlos Body.
Labor market transformation and historic job creation are essential in this scenario. For the years 2025 and 2026, the GDP growth rate exceeds 2%, according to the latest macroeconomic table presented Tuesday by the government and supported by the latest projections from the Bank of Spain or the OECD.
The latter international organization also revised inflation forecasts this Wednesday, estimating that in 2025 it will already be around 2%. An estimate similar to that which it is launching for the entire euro zone, and which will encourage the European Central Bank (ECB) to lower official interest rates and to relax financing conditions and the cost of mortgages and loans in general. Indeed, this Friday, the INE announced that inflation over one year had moderated to 1.5%. This rate has fallen to the lowest levels seen three and a half years ago.
“The continued reduction in inflation continues to demonstrate the effectiveness of economic policy measures and the capacity of the Spanish economy to make the highest economic growth among the main countries of the zone compatible with price moderation euro”, they defend from the Ministry of the Economy.
Access to housing due to rising prices constitutes the main problem for families, especially for the most vulnerable and in capitals and tourist areas, where work is concentrated. The other major economic problem is wealth and income inequality, which means that households that rely solely on their wages have been stifled by inflation, rising interest rates and the housing market.
Another threat (in addition to the real estate market and inequalities) is the risk that the Government will fail to approve the General State Budgets (PGE) for 2025. That same Tuesday, the Council of Ministers agreed to withdraw the objectives parliamentary treatment. .budgetary stability. According to the government, “the objective of this decision is to give more time to negotiation by offering a new opportunity for dialogue” with its parliamentary partners, given the risk that the path will be reversed in Parliament during Thursday’s vote, lack of supports.
Furthermore, the Bank of Spain believes that to comply with the budgetary rules of the European Union (EU), it would be necessary to make reductions and adjustments that would affect all projections. However, before October, the multiannual plan that Spain will have to send to the European Commission will not be known.
