Spain Current Account Balance (% of GDP)

The economy grew slightly in Q4. That said, the breakdown by components shows that consumer spending and fixed investment fell more sharply than in Q3, highlighting worsening domestic demand dynamics. Available data for Q1 2023 suggests that activity remains weak, although the economy should dodge a quarter-on-quarter contraction. The services and manufacturing PMIs rose in January, although the latter remained in contractionary terrain. Meanwhile, consumer sentiment increased slightly, as did economic sentiment. However, the number of registered unemployed rose by about 70,000 in the same month following a worsening of the labor market in Q4. In other news, the EU approved the payment of a further EUR 6 billion in recovery funds in late February. However, the government has not yet provided information on the allocation of funds, provoking criticism from the independent fiscal control agency.