Spain’s economy grew at faster pace in Q1, returned to pre-pandemic levels

SPAIN’S gross domestic product grew 0.6 per cent in the first quarter, National Statistics Institute (INE) said on Friday (Jun 23), as it revised its April estimate of a 0.5 per cent growth.

INE attributed the upgrade to better than expected domestic consumption and a stronger tourism recovery.

“It confirms that we have already returned to pre-pandemic GDP,” the Economy Ministry said in a statement.

Growth data for the fourth quarter of 2022 were also revised slightly upwards.

Spanish GDP in the first three months of 2023 grew 4.2 per cent from the same period a year ago, INE said, up from its previous estimate of 3.8 per cent.

Exports continued to be one of the driving forces of the economy, INE said, as they increased at a faster pace than 10 per cent for the eighth consecutive quarter.

Domestic demand had shown signs of weakening in recent quarters, with households under pressure from inflation and interest rate hikes, but the INE has raised its initial figure.

The services sector, which accounts for more than 70 per cent of GDP in Spain, performed better than expected, with restaurants and retail growing 10 per cent compared to the same quarter last year.

The Bank of Spain expects the country’s economy grew 0.6 per cent in the second quarter and will expand 2.3 per cent in 2023 overall, a faster pace than the 1.6 per cent forecast three months ago.

Government’s official outlook for the full year growth is still 2.1 per cent. REUTERS