Spain’s economy maintained its momentum in the third quarter, growing 0.8% from the previous quarter, the same pace recorded in the second quarter, according to National Accounts data released on Wednesday by the National Statistics Institute, INE.
Year on year, GDP expanded by 3.4%, two tenths higher than the prior quarter and the strongest rate in a year and a half. The acceleration was led by household consumption rising 2.8%, a 4.7% increase in public spending, and a recovery in goods exports of 1.3%, alongside what was described as the best summer ever for international tourist arrivals.
The government maintains its forecast for growth of 2.7% for the entire year.
While the economy keeps its quarterly momentum and even accelerates on an annual basis, job creation remains restrained and hours worked grow more slowly. The number of employed people, measured in full‑time equivalents, rose 1.9% in the third quarter, and hours worked increased 0.9% (down from 2.3% in the second quarter). The result of growth outpacing employment is a rise in productivity per worker, up 1.4%, and per hour worked, up 2.5%.
Year-on-year Growth
Domestic demand contributed 2.7 percentage points to the 3.4% year-on-year GDP growth. External demand added 0.7 points.
By components, final consumption expenditure accelerated by four tenths relative to the previous quarter, rising 3.3% year‑on‑year. Household spending increased 2.8%, and public administration spending rose 4.7%, seven tenths higher than in the prior quarter.
Investment showed signs of weakness. Gross capital formation registered a variation of 0.8%, four tenths below the previous quarter.
Exports posted a 5.1% year-on-year growth, double the pace of the previous quarter. After five quarters with negative rates, goods exports managed a 1.3% year-on-year rise in the third quarter. More importantly, the larger influx of international tourists pushed foreigners’ expenditure up by 14.7%. Exports of services not related to tourism rose notably, nearly quadrupling their growth rate over the last year to 12.5%, according to the Ministry of Economy.
All activities improve
The Ministry of Economy notes that INE data reflect the strength and balanced growth of the Spanish economy, a trend corroborated daily by the main national and international bodies.
From the supply side, all major sectors recorded positive year‑on‑year rates in the third quarter. Manufacturing advanced 4.6% from the third quarter of 2023. Construction grew 2.4%, and services rose 3.6%, driven especially by real estate activities at 6.8%. The gross value added by the primary sector posted a 7.5% year‑on‑year increase in the third quarter.
Wages and benefits
If inflation is considered, nominal GDP growth in the third quarter rose 6.7% year‑on‑year, two tenths more than in the previous quarter. On a quarterly basis, it increased 1.2%.
Looking at income distribution during this period, total remuneration of employees grew 7.2% year‑on‑year, driven by a 2.4% rise in the number of full‑time equivalent salaried positions and a 4.6% increase in average remuneration per position.
Meanwhile, the gross operating surplus and the gross mixed income rose 6.0% year‑on‑year, seven tenths lower than in the second quarter.