The Spanish economy has once again shown signs of strength during the second quarter of the year. According to data published by the National Statistics Institute (INE) and confirmed by Eurostat, Gross Domestic Product (GDP) grew by 0,7% compared to the previous three months, one-tenth of a percentage point higher than in the first quarter. This growth rate surpasses that of the eurozone, which stood at 0,4% , and that of the European Union as a whole, which reached 0,5%.
In year-on-year terms, the Spanish economy held steady with a 2,7% increase, the same percentage it has recorded since the third quarter of 2015. With these figures, Spain once again leads growth among the major eurozone economies , as Germany, France, and Italy each grew by a mere 0,2% in the quarter. Only Ireland, Lithuania, and Sweden, with advances of 3,9%, 1,7%, and 1,4% respectively, outperformed Spain among the 27 member states.
Domestic demand, the main driver of growth
The breakdown of the National Accounts reveals that domestic demand contributed 0,6 percentage points to quarterly GDP growth , while external demand contributed a positive 0.1 percentage point. In year-on-year terms, domestic demand added 3,3 percentage points, although the external sector subtracted 0,6 percentage points, reflecting a growing dependence on domestic consumption and investment, and analyzing the impact of private companies on the Spanish economy and GDP.
Household consumption solidified its position as a major driver of growth. Family spending increased by 0,7% compared to the previous quarter and by 3,2% year-on-year , fueled by the strength of the labor market. The Ministry of Economy highlighted that job creation has continued at a rate exceeding half a million positions annually for the sixth consecutive quarter, and the unemployment rate remains below 10%.
Investment also showed a robust trend. Gross fixed capital formation advanced 0,4% in the quarter and 5,1% year-on-year, with particularly strong performance in intellectual property products (+7,7%) and construction (+5,2%). Industry, for its part, grew 1% quarter-on-quarter , supported by energy efficiency measures in Spanish industry , according to INE data.
Public spending is moderating its quarterly pace
Public spending grew by 0,3% between April and June, three-tenths of a percentage point less than in the previous quarter. However, year-on-year growth was 2,7% , two-tenths of a percentage point higher than in the first quarter. This mixed performance reflects a temporary slowdown in the pace of spending, although the annual trend remains positive.
On the less positive side, productivity per hour worked fell by 0,2% in the quarter and by 0,1% year-on-year, while hours actually worked increased by 2,8% year-on-year. Full-time equivalent jobs rose by 2,3% year-on-year, indicating that employment is growing faster than output, thus hindering efficiency.
Outlook for the year as a whole
With the data from the first half of the year, cumulative growth, or carryover, stands at 2,2%, bringing it closer to the government's official target of 2,6% growth for all of 2026. The Ministry of Economy, Trade and Business, headed by Carlos Cuerpo, has reiterated that the Spanish economy is maintaining its growth momentum and continues to lead the major economies of the eurozone, according to forecasts from leading international organizations.
The Spanish economy has now recorded 24 consecutive quarters of positive quarter-on-quarter growth and 21 consecutive quarters of year-on-year growth. Although the contribution of the external sector remains negative on an annual basis, the strength of domestic demand and investment is allowing the expansion to continue at a pace that, if confirmed, would meet the government's expectations for the end of the year.