Household consumption keeps the growth of the Catalan economy above the European average

BarcelonaHousehold and public administration consumption maintained the growth rate of the Catalan economy in the second quarter at the levels of the last three years, during which it has continuously surpassed the European average. Thus, the Catalan gross domestic product (GDP, the indicator that measures the size of an economy) increased by 3% annually despite the added difficulties caused by the war in the Middle East, according to data confirmed this Monday by Idescat, the Generalitat's statistical institute.

Compared to the previous quarter, GDP increased by 0.7%, just as Idescat itself had already advanced in the first estimates published last July.

The good performance of the Catalan economy –like that of the Spanish one– stands out in a context marked by international instability and the consequences of the war involving Iran, mainly the closure of the Strait of Hormuz. Among these consequences, the rise in the price of oil and natural gas stands out above all, which have increased production costs for a large part of the industry and for services, in addition to increasing the cost of living for families.

Furthermore, this growth in activity coincided, for a good part of the quarter, with the Spanish government's measures to contain the rise in prices. The reduction of some taxes on electricity and gas held back the rise in the cost of living in April and May, but in June, when the Spanish government lifted the measures, prices picked up momentum again.

Thus, the 3% growth rate of the Catalan GDP exceeded that of the Spanish economy by three tenths in the same quarter. Furthermore, it was once again well above the average GDP of the eurozone, which recorded an annual increase of 1.2% in the second quarter, while the average for the European Union as a whole was 1.4%.

These data confirm the positive evolution of the Spanish economy in general and the Catalan one in particular, as in the last three years they have recorded growth rates significantly higher than those of the continent as a whole. This fact is due, above all, to the lower impact of energy shocks – both that of 2022 with the Russian invasion of Ukraine and that of this February, with the attacks by the United States and Israel on Iran – on the State and to a growth model based on services and the creation of new jobs, which are filled in large part thanks to the arrival of foreign workers.

Less productive investment

Despite the good performance of the GDP, the unfavorable international context caused by geopolitical tensions was felt negatively, especially in business investment (also affected by the rising cost of bank loans) and in the industry. In the case of investment, it decreased by 0.5% compared to a year ago in total, with a much sharper drop, of 3.8%, in the case of productive investment in capital goods. This fact is consistent with the slowdown in industrial activity, which did not grow between March and June and stood 1.3% above the levels of the second quarter of 2025.

This fact is, at first glance, bad news after several consecutive quarters of investment growth. Investment is one of the key elements for companies to gain productivity, one of the pending tasks of the Catalan economy according to most experts and one of the priority objectives of the Catalan government.

At the other extreme, household consumption continued to grow at a high rate of 3.4% annually, to which is added 3.2% from the public sector as a whole. This consumption has translated into a 3.8% increase in the services sector, which accounts for more than two-thirds of economic activity. The good performance of services is also explained by the increase in tourism spending starting in April, with a very notable rise of 10.2% compared to the same period in 2025.

Agriculture grew a slight 0.3% annually, despite falling 1.1% compared to the first quarter, while construction maintained the upward trend with an increase of 3.7%, driven by investment in construction, which increased by 3.9% annually.

The foreign sector holds up

Despite the global situation, the Catalan external sector resisted well the negative consequences of the conflict in the Middle East. Exports of goods and services grew by 0.4% annually, while imports grew by 0.6%.