Spain’s economic activity in the second quarter was significantly less dynamic than previously reported.
Compared with the first three months of the year, GDP grew by only 1.1% compared to an initial estimate of 2.8%. Thus, after the first quarter contraction (-0.6%), the Spanish economy took its head out of the water in the spring but did not experience a spectacular rebound.
Household consumption (+4.7%) and, to a lesser extent, public expenditure (+0.9%) were the drivers of the economic recovery. On the other hand, investment fell sharply (-2.2%). Foreign trade also penalised Spanish economic activity with a boom in imports (+4.2%) and weak exports (+0.9%).
In the light of the figures for July, foreign trade will continue to penalise growth in the third quarter. Between June and July, imports fell slightly (-1.5%) while exports fell sharply (-3.8%). As a result, the trade deficit climbed to 1.6 billion € for July alone compared to 2.1 billion for the three months of the second quarter.
Historically, the trade balance had been distinctly negative and had rebalanced somewhat with the economic crisis that had depressed domestic demand. The trade balance has even been in surplus for three months since the beginning of 2020, while statistics from previous decades showed only one month when exports exceeded imports.
But with the slowdown in global demand and the revival of the Spanish consumer, the trade deficit will widen again in the coming months.