Spain grew 5.5% in 2022, above expectations

The Spanish economy grew by 5.

Thomas Osborne
Thomas Osborne
30 January 2023 Monday 11:15
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Spain grew 5.5% in 2022, above expectations

The Spanish economy grew by 5.5% in 2022, exceeding expectations and removing the risk of a recession. Data from the National Statistics Institute (INE), published this morning, show GDP growth in the last quarter of two tenths compared to the previous quarter.

In this way, the economy avoids the recession that had been predicted, although growth in the second part of the year is certainly low, only two tenths of a point in both the third and fourth quarters. The picture of 2022 remains as an economy that had its maximum growth during its first half, especially in the second quarter, to later suffer a clear slowdown in its final stretch. We have been almost at a standstill for two quarters.

In addition, in the last quarter all the growth comes from public consumption and the drop in imports. All other indicators are negative. "The general data is good, but the details are all bad, with a drop in consumption, investment and exports," says Ángel Talavera, from Oxford Economics.

In this field, from the INE data, the fall in household consumption is surprising due to its forcefulness, 1.8% in the last three months. In addition, it occurs at a time when inflation was moderating, which questions the logic of the moment. Several economists point out that it is a data that the INE could review when the final data is released on March 24.

Last year's growth of 5.5% is the same as that of the Spanish economy in 2021. Two consecutive years with this increase in GDP, after the fall of 11.3 points in 2020, due to those derived from the pandemic . However, what changes this year is the trend, since it began with a very powerful first part of 2022 that has slowed down to a minimum in its second stage.

And this almost flat end will have an impact at the beginning of 2023, from which a very moderate growth is expected at its start. "We expect a moderate rate of growth in the coming months, the loss of purchasing power of consumers must be reflected in consumption and, in addition, we must add the impact of the rise in interest rates," says Maria Jesús Fernández, from Funcas .

In its advance, the INE has also modified the growth data that it had calculated from previous quarters. In this sense, it leaves the first quarter with zero growth (before it was one tenth), the second at 2.2 (before 2), and the third at 0.2 (before 0.1).

The Ministry of Economy points out that throughout the year domestic demand has withstood the impact of inflation and rising costs well. They add that "the labor market has maintained its good behavior with the creation of 386,000 full-time jobs and hourly productivity has practically recovered pre-pandemic levels."