Spain’s economy grew 1.5% in the second quarter, more than expected, and fell 0.2% in the first quarter


Tourists in Benidorm in early April.Monica Torres

Spanish economy grew very strong 1.5% in Q2 despite inflation and the uncertainty caused by the war in Ukraine, However, it had declined 0.2% in the first instance. The National Institute of Statistics (INE) has substantially revised the latest quarterly figures this Friday that they published at the end of JulyWhen they projected quarterly growth of 1.1% in the second and 0% in the first.

As a result, it is now known that activity contracted between January and March of this year due to the wave of the Omicron version, causing many job losses, carriers strike, supply problems and extreme inflation. To the extent that domestic consumption fell 1.2% on a quarterly basis.

Instead, the picture changed radically between April and June. The INE update draws on an even greater rebound than was initially calculated on those dates. Hence, the urge to go out was overshadowed by the restrictions imposed by Covid. With good weather, a complete reopening of services and a resumption of international tourism and hospitality finally took place. Domestic consumption rose 1.2% on a quarterly basis, despite massive inflation and uncertainty arising from the war in Ukraine.

As much as energy costs weigh down the industry, in the second quarter it grew 1.7% in the quarter compared to the decline it reported for the first time. And investments also showed great strength, with advances of 3.3% in the first quarter and 2.5% in the second. Although its structure was quite different: in the first, purchases of capital goods declined, increasing by 8.6%, while investment in construction remained stagnant. In the second, the opposite happened and the provision of machinery and equipment increased by 6.5%, compared to a decrease of 2.3% in the provision of machinery and equipment.

The executive argues that this good investment performance is largely explained by the pull of European funds. And he says the impact on the economy will be 2.6 percentage points per year until 2031, a figure that sounds very optimistic and would mean that this year it will contribute half of the expected growth in GDP, and roughly all of that. Will happen. 2023.

Following these changes, year-on-year GDP growth remains strong at 6.8 percent, five tenths higher than before. These data have been published with INE’s new president, Elena Manzanera, already in office following her predecessor, Jose Manuel Rodriguez Poo, resigned at the end of June due to discrepancies with the government, Parts of executives and analysts both agreed that GDP was not being measured well if one takes into account that affiliations are at record levels with more than 20 million workers, and that tax revenues were previously It has exceeded the level of 2021 itself. to pandemic.

Some experts point out that, even though inflation is eroding real purchasing power and there has been a significant expansion of the underground economy with Covid, it is not good that household consumption is still so low, with VAT collection figures 20% higher. Huh. , Consumption and investment figures are slightly worse with the new president inducted. But tourism improves greatly, an astonishing 30% above pre-pandemic levels. After these updates, Spain still has a shortfall of 2.2% to recover to pre-Covid levels, compared to 2.5% left before.

“The overall growth in 2022 will be closer to 4.4%, even if the economy has slowed significantly in the second half of the year,” says Maria Jess Fernandez, an analyst at Funcas.

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