19th July 2024
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Spanish economy grew 2.5% in 2023 – slightly stronger than expected

Spain’s economic growth was slightly stronger than expected in 2023 as gross domestic product picked up pace at the end of last year, official data showed on Tuesday.

The eurozone’s fourth largest economy increased by 0.6% between October and December, up from 0.4% in the previous quarter, and driven largely by household consumption, according to the National Statistics Office (INE).

The economy grew by 2.5% during 2023 despite slowing growth elsewhere in Europe and rising interest rates, surpassing the government’s forecast of 2.4%.

The French economy, by contrast, grew 0.9% last year.

The Bank of Spain last year revised upwards its growth forecast for the Spanish economy to 2.3% in 2023 after the country’s key tourism sector had a solid summer.

Spain welcomed a record number of foreign tourists last year, over 84 million, a 19% jump from 2022.

The rise in visitor numbers helped push the jobless rate to 11.76% at the end of 2023, its lowest level since 2007. ALSO READ: Unemployment in Spain reaches its lowest level since 2007.

Spain is the world’s second-most visited country after France and tourism is crucial for the domestic economy, making up 12.8% of GDP in 2023. ALSO READ: Spanish airports saw record 283 million passengers in 2023.

The country has been a recent outperformer among other large euro-zone nations, having suffered a deeper contraction than most during the pandemic. The government is looking to slowly phase out aid packages put in place after Russia’s war in Ukraine sent energy costs soaring. But it’s rolled over the bulk of them into 2024 as it continues to prop up the economy. ALSO READ: Spain extends some anti-inflation measures, including public transport subsidies, in 2024.

Spain’s annual consumer price inflation rose to 3.4% in January 2024, up from 3.21% in the previous month, surpassing market forecasts of 3.1%.

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