Spain's economy grew slightly more than expected during the first quarter, at 0.8% and up from 0.7% on the previous quarter. It was the highest figure since the second quarter of 2022.
The rise was mainly due to an increase in household spending which grow at 0.4%, the National Statistics Institute revealed.
Imports of goods and services rose 2.2% during the first quarter of the year, whereas exports of the same jumped 3.3%. However, public administration spending fell 0.6%.
On the supply side, most key sectors experienced robust growth, with the manufacturing industry rising 2.2%, and industrial sectors advancing by 1.55%. The construction sector grew by 1.8%, whereas services edged up 0.3%. Primary activities also increased 3.1%.
Year-on-year, Spain's GDP grew 2.5% in the first quarter of the year, above the previous quarter's 2.1%, as well as market expectations of 2.4%.
Spain's economy expected to outpace Germany
The Spanish economy is expected to continue on this growth pace for the foreseeable future, overtaking other major European economies such as Germany.
According to the S&P Global's recently released Eurozone Economic Outlook Q3 report: "Spain, noticeably, continues to beat expectations. The post-pandemic normalisation of tourism is not the only reason for this. Industrial production is continuously expanding in Spain.
"Last year, consumer spending was the main driver of growth, adding one percentage point of a 2.5 percentage-point increase in Spain's GDP. The earlier and sharper fall in energy prices than in the eurozone's other major economies, supported by government measures, partly explains the stronger recovery in consumer spending.
"What's more, Spanish households have de-leveraged and are now no more indebted than their German counterparts, with a debt-to-income ratio of 85% versus 128% in 2012. Spanish households have also made significant changes to their mortgage financing, switching from their traditional variable rates to fixed rates, which makes them less sensitive to monetary policy than in the past."
However, Spain is still dealing with considerably high unemployment levels, with the Spanish unemployment rate for the first quarter of the year coming in at 12.29%, which was the highest figure in a year. It was also above analyst expectations of 11.80%.
Poland also released its unemployment rate report for May on Tuesday morning, which showed a rate of 5%, according to the Central Statistical Office of Poland (GUS), slightly below April's figure of 5.1% and in line with market expectations.
