National demand propels Spanish GDP growth to 0.6% in the fourth quarter of 2023
March 27, 2024 – The Spanish Gross Domestic Product (GDP) grew by 0.6% in the fourth quarter of 2023 compared to the previous quarter, according to data published by the National Institute of Statistics (INE). This rate is two tenths higher than that of the third quarter, indicating a slight acceleration in economic growth.
National demand was the main driver of GDP growth in the fourth quarter, contributing 0.4 points. Household final consumption expenditure grew by 0.2%, while that of Public Administrations increased by 1.0%. Gross fixed capital formation also contributed to growth, with a rate of 0.6%.
On the other hand, external demand contributed 0.1 points to GDP growth. Exports of goods and services grew by 2.7%, while imports increased by 2.5%.
In year-on-year terms, Spanish GDP grew by 2.0% in the fourth quarter of 2023, one-tenth more than in the previous quarter. Domestic demand contributed 2.1 points to year-on-year growth, while external demand subtracted 0.1 points.
Employment also continued to grow in the fourth quarter. The number of hours actually worked increased by 2.8% year-on-year, while full-time equivalent jobs increased by 3.9%.
Productivity, however, remained negative in the fourth quarter. Productivity per full-time equivalent job fell by 1.8% year-on-year, while productivity per hour actually worked fell by 0.8%.
For the whole of 2023, Spanish GDP grew by 2.5% in volume. Domestic demand contributed 1.7 points to growth, while external demand contributed 0.8 points.
These figures are positive and confirm the economic recovery in Spain, although productivity remains a cause for concern. The Spanish Government has implemented measures to boost productivity, such as the labor market reform and investment in education and innovation.
Economic growth is expected to continue in 2024, albeit at a more moderate pace than in 2023. The main risks to the Spanish economy are the war in Ukraine, inflation, and rising interest rates.
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