The economy accelerated to 0.6% in the first quarter and recovers the pre-pandemic level


Spain stepped on the accelerator in the first quarter of the year and its economy advanced to 0.6%, one tenth more than expected and from what was registered at the end of last year, thanks to the drive of the foreign sector (given that exports grew by 5.7% due to the improvement in competitiveness that national companies have registered and imports by 2.6%) and thanks, also, to the fact that companies raised their investment by 3.5%. The National Accounts data published this Friday by the National Statistics Institute (INE) also confirm that the country already recovered the level of growth prior to the pandemic between January and March.

In year-on-year terms, activity accelerated its growth to 4.2%, four tenths more than previously calculated by Statistics, which places Spain as the fastest growing economy in the entire European Union, as highlighted by the First Vice President and Minister of Economic Affairs, Nadia Calviño, who highlights that we are growing four times more than the average. The data for the beginning of the year confirm that the dynamism of employment continues with the creation of 426,000 full-time jobs in the first quarter.

The good evolution of the foreign sector and business investment has taken place in a context in which the family consumption plunges 1.4% Compared to the previous quarter, with inflation still at high levels, especially in the case of food, and with more expensive financing – due to the rise in interest rates – which is having a direct impact on households with a variable rate mortgage with the rise of the Euribor.

Thus, national demand subtracts 0.9 points from the quarterly increase in GDP, while the foreign sector contributes 1.5 points. By sectors, services, which had been one of the engines of economic growth, stagnated in the first quarter, while the rest of the branches of the economy registered improvements: agriculture grew by 3.8%, 2.4% did so in construction and 1% advanced in industry.

If the comparison is made with the same period a year ago, national demand contributed 1.4 points to year-on-year GDP growth between January and March, a figure three tenths higher than that of the previous quarter, while external demand contributed 2.8 points, nine tenths more. Specifically, final consumption spending increased by 1.6% compared to the same period in 2022, a rate that also shows a slowdown in this variable, since it is 1.3 points lower than that of the previous quarter.

With regard to household consumption, it rose 1.6% year-on-year, almost one and a half points less than in the previous quarter. For its part, the final consumption expenditure of the Public Administrations registered growth of 1.4%, which, de facto, represents a drop of 1.1 points compared to the behavior registered between October and December of last year. .

In the labor market, the INE finds that the number of hours actually worked increased by 0.4% in relation to the previous quarter, when they registered a fall of 0.1%. If this reference is taken in year-on-year terms, the increase in the number of hours actually worked moderated by 1.5 points, so that its growth stood at 1.4%. This implies that the interannual variation in productivity per full-time equivalent job was 1.9%, while productivity per hour actually worked increased by 2.7%.

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