The Spanish economy is resilient. Its pace of activity slows down, but continues to grow despite the complex international environment. In the third quarter, GDP increased by 0.3%, confirming the advance data, and yes, far from the start of the year with two first quarters with activity increasing by 0.6 and 0.4% respectively. It is consumption that continues to drive growth, with a 1.4% increase in household consumption compared to the previous quarter.
Here we can see the effects of good employment performance, and the gain in the purchasing power of families, thanks to both the moderation of inflation and the increase in salaries agreed in the agreements. A sum of factors that has allowed families to increase their consumption in the summer months.
At the other extreme, the fall in exports is also confirmed, especially punished by the economic anemia of our European partners, losing strength, and falling by 4.1% compared to the previous quarter. Imports also decreased by 2.9%.
The Ministry of Economy highlights that “the Spanish economy maintains dynamism”, with differential growth compared to the euro zone, which remains mired in stagnant activity. They also point out how growth is based on the drive of national demand, with private consumption as the main actor, while on the supply side, the sectors that contribute the most to activity are the manufacturing industry and services.
For his part, Raymond Torres, from Funcas, highlights that the slowdown is less than what could have been expected, if the slowdown in exports and the effects derived from the increase in interest rates are added. “The labor market is holding up and employment continues to progress, although less than in the spring, and the recovery of the purchasing power of families is achieved thanks to the deflation of energy prices and specific phenomena of recovery of purchasing power in collective agreements,” he states.
The least buoyant data is the investment outlook, which falls one point compared to the previous quarter. And this despite the investment represented by European funds, although it is true that the great impact of the Next Generation is expected to occur in 2024 and 2025, according to calculations by the Bank of Spain. “The evolution of investment is worrying,” says Torres, who highlights how investment in capital goods is still below pre-pandemic levels.
Looking ahead to next year, the Bank of Spain pointed out this week that its forecast is a growth of 1.6%, a considerable decrease from 2.4% this year. It is a perspective that feeds the data known today. A fourth quarter of this year in which growth will probably also be around 0.3%, and which may slow down somewhat more in the first months of 2024. An important part of the evolution will depend on the monetary policy of the ECB, from when it begins to relax it and lower rates.
