The Spanish economy is off to a good start in the year. It registers a growth of 0.7% in the first quarter of 2024, which is the same percentage as in the last three months of last year. In recent weeks, various indicators already pointed to the fact that the result of the increase in GDP in the first part of the year would be very positive, and this has been amply confirmed by the data published yesterday Tuesday by the National Institute of Statistics ( INE). A much better figure than the one predicted by the Bank of Spain in mid-March, which left it at almost half, 0.4%.
The salient elements of this data are three. On the one hand, the growth of investment, one of the elements that was weakening in the Spanish economy and the one that worries the most, and which, on the other hand, increased by 2.6% this quarter. It did not grow so much since the first quarter of last year and it is a percentage that contrasts with the 1.6% fall at the end of 2024. In this area, the 3.7% growth in investment in goods particularly stands out equipment
On the other hand, the impact of the good performance of exports and a consumption that maintains the rate, but timidly, is noticeable. Exports marked an increase of 2.4% and are the drivers of a good part of the growth of seven tenths of the GDP. Here, tourism comes to the rescue, because the export of services, which includes the tourism sector, is particularly noteworthy, which increased by 11%, and, if we focus on the expenditure of foreign tourists, we see that it increased by 19%.
Meanwhile, household consumption increased by 0.3%. It maintains the same growth rate as in the previous quarter, a positive but relatively modest percentage when compared to the good data on family income and the labor market.
Growth is widespread in all sectors, despite the fact that the growth of the manufacturing industry stands out, with 2.2% in the quarter, and construction, with 2%.
“The growth in investment is a good sign, after the weakness it had shown in the previous quarters – says María Jesús Fernández, from Funcas-. However, it is still below pre-pandemic levels and the diagnosis of investment weakness cannot be changed for the time being”. What this quarter does show is a better composition than the previous one, especially because it is not dependent on public administration spending.
“It is good data that exceeds expectations, that stands out for the quality of growth, and that takes place in a context of global uncertainty, with the inflationary shock that is still there and trading partners with weak growth”, says Oriol Aspachs , from CaixaBank Research. With regard to consumption, the economist explains that there are conditions for it to improve its behavior even more and “take a step forward”, perhaps when the inflationary cycle is considered closed and interest rates finally fall.
For the Ministry of the Economy, these data place Spain in “an optimal position” to meet the 2% growth target for this year and emphasize that it confirms the differential between the increase in Spanish GDP and that of the main economies of the euro zone. They also point to the balanced nature of growth during the quarter, with a positive contribution from both domestic and foreign demand.
In recent weeks, there had already been positive symptoms regarding growth in the first quarter. Elements such as growth in Social Security enrollment, accelerating PMIs and improving consumer and sector confidence were already pointing to good growth, and it has been confirmed, even above of expectation, with 0.7%.
Last year, a final acceleration allowed the Spanish economy to close the year with a growth of 2.5%, thanks to the push for consumption, both by the private sector and by public administrations, which allowed it compensate for the drop in investment in the second part of the year.
Today the INE has also reviewed the quarterly growth of last year, increasing by a tenth that of the last quarter (0.7%) and that of the third (0.5%), while it has reduced that of the first (0.4%).
