The economy is slowing down, but slightly and maintaining a relatively high growth rate for the moment and, in any case, better than had been predicted. Consumption and investment, especially in construction, have driven growth, so that the National Institute of Statistics (INE) has revised up one tenth both the first quarter of the year and the second, up to leaving them at 0.6% and 0.5%, respectively.
There is a slowdown, as evidenced by the fact that the second quarter grew one tenth less than the first, and it is even clearer in year-on-year terms, with GDP slowing to 2.2%, compared to 4.2 % the previous quarter. Despite this brake, this figure is four tenths more than the one advanced in July, so the economy has performed better than expected.
These are more positive data than those previously calculated, although with a similar trend. The economy goes from more to less, which supports the thesis of a progressive deceleration throughout the year, but always remaining at a level much higher than that of Europe.
In addition, with the new figures, it is practically guaranteed that growth in 2023 will be close to 2.3%. “In the second semester we will get worse, but unless there is a recession, the minimum of 2.3% is guaranteed”, says Manuel Hidalgo, from Pablo de Olavide University. To put ourselves in perspective, with flat growth in the third and fourth quarters, GDP for the year would grow by 2.3%. From now on, we will probably see a succession of upward revisions of the forecasts for the year as a whole by the different economic bodies.
This review joins the one carried out by the INE on Monday, in which, since it had more data on growth in the period 2020-2022, it was found that the Spanish economy recovered the pre-pandemic level in the summer of 2022. So earlier than previously anticipated. Now, this second quarter of 2023, it is already two tenths above the level at the end of 2019.
One of the elements that explains the growth is household consumption, with an increase in both the first and second quarters, and which makes consumption one of the pillars of the recovery. Instead, both exports and imports entered negative rates, in contrast to the progress they experienced between January and March. The brake on exports was announced, once it was verified how the economy of our European neighbors was being slowed down.
“It is an upward revision that does not change the overall narrative: the economy is doing better than thought and is holding up better to the impact of inflation and interest rates, better than other European countries, and there it has a lot to do with private consumption”, explains de la Funcas. He also adds that, on the other hand, investment in machinery and equipment suffers more in the second quarter and that construction holds out longer, probably due to the boost provided by the European recovery funds.
From the Ministry of Economy they point out that “the 2023 data certify that the dynamism, solidity and resilience of the Spanish economy is maintained with a growth of more than 2%, which is particularly significant in a context of high uncertainty international and rising interest rates”.
With these data, the x-ray of growth this year is presented with a good start, but with all the signs pointing to a slowdown in the second semester. This is what both Airef and the Bank of Spain have pointed out in recent days, which calculated a third quarter with growth of 0.3% and with the slowdown that would also continue in 2024. That is why the The Bank of Spain lowered its growth forecast for 2024, down to 1.8%.
