Spain: The economy grinds to a near-halt in the third quarter
November 2, 2022
According to a preliminary estimate, GDP rose 0.2% on a seasonally adjusted quarter-on-quarter basis in Q3, decelerating notably from the 1.5% increase recorded in Q2. The economy was buffeted by soaring production costs and inflation weighing on investments and exports. In year-on-year terms, the economy grew 3.8% in Q3, down from Q2’s 6.8% expansion.
Notable decelerations in fixed investment growth and external demand drove the quarterly cooling: Fixed investment rose only 0.6%, weighed down by a downturn in housing investment (Q2: +2.5% s.a. qoq). Meanwhile, private spending rose 1.1% on a quarterly basis—following a 1.2% expansion in Q2—despite soaring energy prices and benefiting from a resilient labor market and accumulated savings. Meanwhile, government consumption increased 0.6% from the prior quarter (Q2: -1.3% s.a. qoq).
Meanwhile, the external sector weighed on the economy as exports growth slowed: Exports of goods and services rose 1.3% in seasonally adjusted quarter-on-quarter terms (Q2: +4.9% s.a. qoq), while imports were up 3.7% in quarterly terms (Q2: +2.8% s.a. qoq).