Data published by the National Statistics Institute (INE) showed that the economy expanded by 0.3% in the 3rd quarter, confirming economists' forecasts, but recording the weakest growth since the 1st quarter of 2022. In the 2nd quarter, GDP increased by 0.4%. Meanwhile, in annual terms, economic growth slowed to 1.8% (in line with the preliminary estimate and economists' forecasts) from 2% in the 2nd quarter.
"These data confirm the Spanish economy's growth differential with the main countries in the euro zone and are in line with macroeconomic outlook," the Economy Ministry said in a statement.
Internal demand and government spending boosted economic growth, INE data showed. Investments in fixed assets fell by 0.6% QoQ after an increase of 1.8% QoQ in the 2nd quarter. Net external demand had a negative impact on GDP, with exports declining faster (-4.1% QoQ versus -3% QoQ in the second quarter) than imports (-2.9% QoQ versus -2.1% QoQ). Household consumption rose by 1.4% QoQ (the largest increase in a year) after an increase of 0.8% QoQ in the 2nd quarter, and government spending increased by 1.3% QoQ, as in the 2nd quarter.
Earlier this week, the Bank of Spain lowered its GDP growth forecasts for 2024 and 2025, citing a slowdown in private consumption. The Bank of Spain expects economic growth to slow to 2.4% in 2023 from 5.8% in 2022. As for 2024, the GDP growth forecast was lowered by 0.2% to 1.6%. While it was expected to pick up steam in 2025 and grow 1.9%, that was also short of the 2% predicted earlier due to “a less favorable outlook for future developments in household consumption”.