The Diplomat The growth of the Spanish economy stood at 2.9% year-on-year during the second quarter of 2023, three-tenths above the rate recorded in the previous quarter, according to the advance of the Quarterly National Accounts published yesterday by the National Institute of Statistics. In quarterly rates, the GDP growth was 0.8%, similar to that of the first quarter. The Chamber of Commerce of Spain indicates in a press release that the strength shown by Spain's GDP in the second quarter can be attributed to a greater contribution to the growth of external demand (0.9 percentage points compared to 0.3 in the first quarter). In this sense, exports have registered a higher growth than imports (3.6% for the former compared to 1.4% for the latter). From the point of view of national demand, this has lost some momentum. Final household consumption has registered an interannual growth of 2.3%, two-tenths of a percentage point lower than the rate observed in the previous quarter. For its part, public consumption has grown by 2.3% year-on-year, which represents a deceleration of more than one percentage point compared to the growth of the previous quarter (3.4%). Employment measured in terms of full-time equivalent jobs registered an interannual growth of 2.0%, which represents a moderation compared to that experienced during the first quarter (3.2%). In any case, this progress remains very significant and has allowed the creation of more than 392,200 jobs in the last year. In line with the dynamism that the Spanish economy has been showing in recent quarters, the Spanish Chamber of Commerce has revised upwards its growth forecasts for both the year 2024 and 2025. Specifically, for the year as a whole, GDP growth of 2.4% is expected, which could slow down to 2.0% in 2025. In any case, these are forecasts subject to considerable uncertainty given the volatility of the environment in which global economic activity is taking place. The Spanish Chamber expects growth in employment to be 2.0% during 2024 and 1.5% during the next year, creating more than 400,000 jobs this year and 305,000 next year. In parallel, the Spanish Chamber considers it crucial to address the reduction of public debt. The report states that Spain's high level of public debt limits its ability to invest in infrastructure, education and other areas vital to sustainable development, as well as to deal with potential negative economic shocks. Furthermore, reducing debt and stabilising public finances would improve investor confidence and reduce long-term financing costs for both the State and companies. Therefore, it sees the need for an integrated approach that combines increased productivity and prudent management of public debt to ensure robust and sustainable economic growth.
