Family consumption maintains the growth of the Spanish economy despite the shock of the war in Iran

BarcelonaThe Spanish economy held its ground in the first quarter of this year, despite the negative impact caused by the outbreak of the war in Iran and the consequences on energy markets and international trade. Household spending allowed the gross domestic product (GDP, the indicator that measures the size of an economy) of the State to maintain the good figures of the last three years, according to the National Statistics Institute (INE) reported this Thursday.

Thus, the INE has confirmed the growth data for the first quarter that had already advanced preliminarily at the end of April. Specifically, Spanish GDP expanded by 2.7% compared to the first quarter of 2025 and by 0.6% compared to the fourth quarter of last year.

Due to the conflict in the Persian Gulf, which began on February 28, the external sector registered a drop, which was largely offset by the strength of domestic demand, particularly household consumption and, to a lesser extent, public administrations. Investment slowed during the quarter but remained well above previous year levels.

In fact, of the 2.7 percentage points of growth, the contribution of the external sector was negative: it subtracted 0.8 points. On the other hand, the contribution of domestic demand was positive, at 3.5 points.

Consumption drives the economy

Family consumption grew by 3.2% compared to a year ago and by 0.6% compared to the previous quarter, figures that show that thanks to the strength of job creation, household spending is consolidating as the main driver of growth in Spain. Investment, the other element that has boosted GDP in recent years, experienced a slowdown and increased by 0.1% in one quarter, but ended the first three months of 2026 a notable 5.8% above the levels of a year earlier.

In the external sector, exports remained in positive territory, with an annual increase of 0.8%, but well below the figure recorded in the fourth quarter of 2025, when the growth rate had approached 4% annually. Compared to the previous quarter, sales of goods and services abroad fell by 0.6%, a significant drop. Imports also fell compared to the fourth quarter, in this case by 1%, but remained 3.2% above the levels of a year ago.

These figures show how the first quarter was already affected by uncertainty in international markets as a result of the attack by the United States and Israel on Iran, which spread to several Middle Eastern states and affected, above all, the exports of oil and natural gas from the region. Bombings against oil facilities in both Iran and countries such as Kuwait, the United Arab Emirates, and Qatar caused the price of crude oil to rise to levels above, at one point, 100 dollars per barrel. To this must be added the closure of the Strait of Hormuz, a strategic passage between the Persian Gulf and the Indian Ocean through which 20% of the world's oil trade usually passed.

Although the impact of the war was already evident, only one month of conflict, which began on February 28, is accounted for in the first quarter. Similarly, the support measures for families and businesses to mitigate the impact of rising energy costs that was approved by the Spanish government at the end of March. We will have to wait, therefore, for the GDP data for the second quarter to know the total effect on economic activity in Spain.

Services, leading the way

By sectors, construction grew at a rate of 6.3% annually, although compared to the previous quarter it remained flat. Services – the sector most affected, for better or worse, by family consumption and representing two-thirds of GDP – evolved positively, with increases of 0.8% quarterly and 3.4% annually.

Industry grew by 1.6% annually and 0.3%, both the sector as a whole and manufacturing, which is why it withstood the increase in energy and transport costs derived from the war in Iran. Finally, activity in the primary sector fell by 3.3% both annually and quarterly.