According to official data, strong performance in the tourism and agriculture sectors contributed to an increase in Spain's GDP in the fourth quarter of 2024. At the same time, unemployment is at a record low for the last 16 years, reports Euronews.
According to the National Statistics Institute (INS), Spain's GDP growth rate for the period rose by 0.8% on a quarterly basis. This is the same as in the previous quarter and above analysts' forecasts of 0.6%.
Domestic demand added 1.2% to GDP as final household consumption rose 1% and government spending rose 0.4%. Spanish government spending since the pandemic has been significantly supported by public investment schemes such as NextGenerationEU.
Imports of services and goods rose by 1.3% and exports by 0.1%.
Industrial activity grew by 0.3%, supported mainly by strong manufacturing and construction sectors. Services also grew by 0.9%, but the primary sector declined by 0.7%.
On an annual basis, Spain's GDP grew by 3.5% in Q4 2024, up from 3.3% in the previous quarter and above market estimates of 3.2%.
For the whole of 2024, the country's economy advanced by 3.2%, which is well ahead of the rest of its euro area peers.
According to the NSI, Spain's unemployment rate for the fourth quarter of 2024 was 10.61%, down on the previous quarter (11.21%) and below analysts' expectations (11.1%). This is also the lowest unemployment rate since the second quarter of 2008.
The number of people out of work in the fourth quarter of 2024 stood at 2.596 million, down 158,600 from the previous quarter. The number of people with jobs in the fourth quarter rose to 21.86 million, an increase of 34,800.
In the fourth quarter of 2024, the industrial sector increased the number of jobs by 7,000, while the service sector grew by 24,000 and the agricultural sector by 3,200. Job growth in the construction sector was weak, adding only 600 jobs in the fourth quarter.
However, Spain is still confronted with the ongoing housing crisis as well as the rising cost of living, which has led to a sharp increase in rental prices and is having a negative impact on living standards.
BBVA Research stresses on its website that it expects the Spanish economy to continue to recover in the coming months, but notes that it is likely to remain vulnerable to the ongoing effects of the floods in Valencia, as well as possible tariffs imposed on the EU by the US. The company forecasts that Spain's GDP will grow by 2.3% in 2025 and by 1.7% in 2026 | BGNES
