Spanish Economy Shows Resilience Amid Euro Zone Weakness

By Belén Carreño
(Reuters) – The Spanish economy demonstrated strength relative to its peers in the first half of the year, achieving a growth rate of 0.9% in the first quarter and 0.8% in the second quarter, as per revised data released by the National Statistics Institute (INE).

The revision elevated the annual growth rate to 3.1%, aligning with the government’s upward revision of 2.7% for the year, following successive revisions by both public and private organizations.

Analysts had anticipated a growth of 2.9%, as indicated in a Reuters poll.

In contrast, euro zone countries reported a growth of only 0.3% in the second quarter, with a projected outlook of 0.8% for 2024.

Against the backdrop of other euro zone nations' struggles, Spain's economy showcased resilience to interest rate hikes, evidenced by a 1% rise in private consumption, which bolstered domestic demand.

Investment saw a modest increase of 0.3% on a quarterly basis, despite the use of European Union recovery funds.

Services emerged as a major contributor to the economy in the second quarter, with the hospitality sector swelling by 2.6%. Meanwhile, the industry also marked improvement, particularly manufacturing, which grew by 1.5% quarter-on-quarter, benefiting from reduced energy prices, enhancing its competitiveness against other EU countries.