Business investment maintains the growth of the Catalan economy

BarcelonaThe Catalan economy maintained a growth rate in the second quarter above the European Union average but slightly below the growth recorded in Spain as a whole, according to Catalan GDP data published this Monday by Idescat, the statistical institute of the Generalitat (Catalan Government). Investment, especially business investment, was one of the driving forces behind growth in Catalonia, despite a slight slowdown in household and government consumption and a drop in exports.

Specifically, between April and June, Catalan GDP increased by 0.6%, four-tenths more than in the previous quarter. Compared to the second quarter of 2024, growth was 2.7%, which represents a decrease of one-tenth compared to the previous quarter. the first estimate by Idescat published last month. The 2.7% places the growth rate of the Catalan economy one figure below the Spanish average, also awaiting the updated data that the National Statistics Institute (INE) will publish next week.

However, the growth of the Catalan economy continues for another quarter, well above the European average: in the eurozone, the annual GDP growth rate was 1.4% in the second quarter, while in the EU as a whole it was 1.5%, according to Eurostat, the community statistical agency.

The regional minister for Economy, Alícia Romero, assured this Monday in a message to X that the data confirms that Catalonia "is going in the right direction." The head of Economy of the Generalitat highlighted that growth was "slower than in the first quarter" but, nevertheless, "high," which shows the "good pace" of growth of the Catalan GDP.

Investment pulls the cart

Investment was the main pillar of growth in the face of slowing public and private consumption, particularly business investment. Thus, investment in capital goods (machinery, software, vehicles, and other productive assets used by companies) increased by 9.3% in the second quarter compared to the same period last year.

Likewise, investment in the construction sector also grew, albeit less rapidly, by 3.5%. Overall, investment grew by 5.3% annually, an increase compared to the first quarter of this year, when it stood at 4.7%.

The strong performance of investment is positive news for the Catalan economy, as investment is one of the factors that most influences productivity, traditionally one of the weak points of the Catalan and Spanish economies. Furthermore, investment stood out even more last quarter due to the slowdown in household consumption, which fell from 4.1% year-on-year growth in the first three months of 2025 to 3.5% in the previous quarter.

Public administration consumption also reduced growth, despite maintaining clearly positive figures, increasing by 2.2% year-on-year (in the first quarter, the variation had been 3.2%).

As for the foreign sector, it was the only element that detracted from the evolution of Catalan GDP. Overall, the balance with foreign countries—that is, with third countries and with the rest of the State—decreased by 0.5% annually, with the balance with foreign countries suffering a smaller decline, of 0.3%. Consumption by non-residents (a variable that essentially includes spending by tourists visiting Catalonia) slowed to a 1.1% increase (the previous quarter had increased by 4.1% annually), while exports of goods and services grew by 2.2%, below the 3% increase in imports.

The slowdown in the foreign sector makes sense in a context of geopolitical uncertainty due to various conflicts and the aggressive tariff policy of the United States, which have impacted trade between this country and the European Union. Although Catalonia has limited exposure to the North American market, the fact that many Catalan companies are part of the supply chains of industries in countries such as Germany, France, and Italy means that the tariffs imposed by US President Donald Trump will also end up negatively impacting Catalan GDP.

Good news for agriculture

By sector, the primary sector maintained a strong growth trend after serious difficulties caused by drought and abnormal temperatures. Agriculture, livestock, and fishing increased their activity by 4.4% in the second quarter compared to the same period last year, a figure that is on par with the 7% recorded in the previous quarter.

As for services, which represent more than two-thirds of GDP, their activity increased by 3.1% annually, with trade, hospitality, and transportation being the most notable sectors. Furthermore, construction grew by 2.3% (the same as in the first quarter) and industry by 1.2%, seven-tenths less than the figure recorded at the beginning of the year. In the latter case, industry is the sector most affected by international geopolitical and trade tensions, which explains why the growth rate has been lower compared to other major sectors.