The Spanish economy hits the accelerator in the second quarter

BarcelonaThe Spanish economy accelerated its growth rate during the second quarter of this year and even surpassed the figures recorded by the Catalan economy, according to data published this Friday by the National Institute of Statistics (INE). Business investment and household consumption were the two main drivers in a period marked by the trade war between the United States and the European Union.

Thus, Spain's gross domestic product (GDP, the indicator that measures the size of an economy) increased by 0.8% compared to the previous three months, two-tenths of a percentage point above the variation recorded between the first quarter of 2025 and the fourth quarter of 2024. Likewise, the state economy grew by 3.1% compared to the European average. In this sense, the Spanish data far exceed the 0.1% quarterly increase and the 1.4% annual increase recorded in the eurozone as a whole, something common in the last two years, when Spain has been the country with the highest growth among the major countries of the European Union. "This places us, from an international comparison perspective, once again leading growth among the major world economies," stated Economy Minister Carlos Cuerpo in a statement to the media.

With these figures, furthermore, Spanish GDP is also accelerating at a faster rate than Catalan GDP, something that has not occurred since the summer of 2023. Specifically, Catalan GDP increased by 2.7% annually in the second quarter, four-tenths less than the Spanish figure. In fact, the preliminary data released in July by the INE pointed to a rate of 2.8% for the country as a whole, but the good performance of the economy has increased this figure to 3.1%.

In this sense, the Spanish government expects that 2025 will be even better than expected in terms of GDP performance. From the outset, both Pedro Sánchez's government and the majority of Spanish and international economic institutions predicted levels of economic activity expansion in Spain that would be significantly higher than the European average for another year, but in recent months these forecasts have even been improved. In this regard, Cuerpo has stated that the state of the state economy is "very comfortable and optimistic to meet" the Spanish government's growth forecasts, which Last week it increased to 2.7% on average this year.

More investment and more consumption

The Spanish economy's strong performance is due to several factors and, in addition, it occurs at a time of trade tensions caused by the aggressive tariff policy of the United States, which has affected a large part of the export activity of Central European countries, such as Germany, Italy and France, which are more dependent than Spain on international markets (this is not the case in Catalonia, which is not the case in Catalonia due to the greater weight of the manufacturing industry, which is more export-oriented).

However, there are two elements to consider, according to INE data, namely investment and household consumption. The former is the variable that grew the most in the second quarter, with an increase of 1.8% compared to the previous quarter and 5.8% compared to a year earlier. Public spending, on the other hand, remained almost stable.

As for household consumption, which has a much greater weight in GDP than investment, it increased by 0.8% quarterly and 3.4% annually and was once again one of the engines of growth. This household spending that underpins growth is largely due to the creation of jobs—particularly in the service sector, mostly filled by foreign workers—and to improved wages, which have recovered some of the purchasing power lost during the inflationary crisis of 2022 and 2023 triggered by the Russian invasion.

The other side of the coin, precisely because of the tariffs, is the foreign sector. Exports continued to grow, 1.3% compared to the previous quarter, but at a slower pace than imports, increasing the negative trade balance the State has with the rest of the world. In fact, of the 3.1% GDP growth rate in the second quarter, domestic demand—that is, economic activity within Spain's borders—contributed 3.5 percentage points of growth, but the foreign sector subtracted 0.4 points, according to calculations by the INE (National Institute of Statistics and Census).

By sector, services, which represent more than two-thirds of GDP, grew 3.4% annually, surpassed by the 4% growth in construction. Industry also grew, in this case by 2.6% (manufacturing increased by 2.2%) and the primary sector by a slight 0.1%.