The Spanish economy has managed to accelerate its growth rate during the second quarter of the year, consolidating an upward trend in an international environment of great uncertainty. According to the National Accounts data released this Thursday by the National Institute of Statistics (INE), the Gross Domestic Product (GDP) advanced by 0.7% between April and June, which is one tenth more than the increase recorded at the start of the year. In year-on-year terms, activity maintains an advance of 2.7%, the same as the previous quarter. For the Minister of Economy, Carlos Cuerpo, this figure places Spain at the forefront of the major economies of the eurozone, as he pointed out in a brief press note.
Read more Inflation rises to 3.5% in July due to fuels and electricity
This dynamism has allowed the accumulated growth for the whole year to already stand at 2.2%, which, according to the Government, facilitates meeting the annual target of 2.6% set in its macroeconomic framework. The quarterly advance has been mainly supported by the strength of domestic demand, with household consumption growing by 0.7%, and by investment that maintains its momentum, especially in the field of intellectual property and construction.
This evolution of activity is in line with analysts’ forecasts. María Jesús Fernández, from Funcas, predicted an advance between 0.7% and 0.8% for this period, arguing that various sectoral factors would offset the weakness of domestic consumption. For his part, Miguel Cardoso, chief economist for Spain at BBVA Research, anticipated that growth could remain stable at 0.6%. Despite the small numerical difference, both agree that the external sector and investment have been the true buoyancy of the economy in this period, compensating for the exhaustion of some traditional engines. Investment ―gross fixed capital formation― stands out, having rebounded by 0.4% in the quarter.
One of the determining factors in the field of investment has been construction, which has regained momentum after a erratic start to the year. Fernández explains that this sector came to a halt in the first quarter due to bad weather, but between April and June it has once again contributed positively to GDP. This reactivation adds to the dynamism of investment in intellectual property, which grew by 7.7% year-on-year. However, Cardoso warns that other components of investment, such as transport equipment, have suffered significant declines in a context of global uncertainty and increased tariffs that complicate business decision-making.
On the domestic demand side, household consumption shows signs of resilience but also fatigue. Although the INE highlights a quarterly advance of 0.7%, analysts warn of a structural slowdown compared to last year’s rates above 0.9%. This cooling responds to the persistent pressure of prices, with inflation in July climbing to 3.5% driven by fuels and electricity. Cardoso emphasizes that this moderation in spending could raise the household savings rate as a precautionary mechanism against the instability of energy markets.
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