The Spanish economy is strengthening its resilience with GDP growth of 0.7% in the first quarter of 2024.

The Spanish economy is doing very well. Gross domestic product (GDP) grew 0.7% in the first quarter of 2024, according to preliminary GDP data released Tuesday by the National Institute of Statistics (INE). Despite the fact that inflation has not fully broken away from stable prices above 3% and that the EPA’s first quarter disappointing with the loss of 140,000 jobs and the unemployment rate rising to 12.3%, both the household consumption and foreign sectors have cemented our growth trajectory economy.

In fact, at an interannual pace, GDP growth accelerated to 2.4%, the highest level in the past year, with the economy stabilized, where growth in the first quarter was balanced, with positive contributions from domestic and external demand.

According to INE, the contribution of domestic demand to quarterly GDP growth was 0.2 points, while the contribution of external demand was 0.5 points, even though our main market, the European Union, is in a state of alarming sluggishness.

The Ministry of Economy explained that “the good performance of the Spanish economy at the end of last year and the good data for the first quarter put us in an optimal position to achieve the growth target planned for 2024 of 2%.”

In the first quarter of the year, household consumption rose 0.3%, the same as the previous quarter, while government spending fell 1%, its first negative quarterly figure since the second quarter of 2022.

The performance has already been an improvement from last year, when the economy grew 2.5% in 2023, exceeding the expectations of leading advanced economies. GDP (Gross Domestic Product) growth accelerated to 0.6% in the final quarter of last year compared to the previous quarter.

The International Monetary Fund (IMF) has already highlighted this trend in its latest report, only improving its 2024 growth forecasts for Spain and the US among advanced economies. The organization raised its GDP growth forecast for our country by 4 tenths, from 1.5% in January to the current 1.9%, while observing a slowdown in the rest of the European Union (EU).

It is worth noting the good performance of investments, which had negative performance in previous quarters, but increased in the first quarter of this year. What stands out is the growth of investment, especially in capital goods and housing, with an increase of 3. 7% and 3% respectively.

If we talk about specific sectors of the economy, then in this first quarter of the year, “all major sectors showed positive value added indicators.” Thus, industrial sectors grew by 1.6% quarter-on-quarter, while strong growth in the manufacturing industry accelerated by one point, to 2.2%.

Construction gross value added increased by 2.0%, up eight-tenths from the previous quarter. And in the services sector it accelerated by one tenth, to 0.3%. Agriculture recorded a quarterly variance of 2.5% compared to 5.3% in the previous quarter.

Minister of Economy, Trade and Business Carlos Bodi stressed that the GDP progress data confirms the “strong dynamism” of the Spanish economy. “These growth figures, together with the positive dynamics of employment in our foreign sector, confirm the good performance of the Spanish economy in recent quarters with differential growth in relation to our main partners, and all this even in noticeable conditions due to high uncertainty,” noted the head Ministry of Economy.