The growth of the economy during the first quarter of the year remained at a weak 0.2%, which is one tenth less than the anticipated figure and a slowdown compared to the pace that the recovery had taken. The cooling of the economy is confirmed. From growth of 2.6 in the third quarter of last year, it was reduced to 2.2 in the last three months and now, it slows down to only 0.2.
It is a fall caused in large part by the brake on consumption. Household consumption falls by 2% in relation to the previous quarter. It represents a setback when it had been increasing for three consecutive periods and feeding the economic engine. However, it is a smaller drop than the anticipated data that placed it at 3.7%.
Growth in the first quarter of the year has been significantly hampered by three factors. On the one hand, the impact of the omicron variant on leisure activities. In addition, the invasion of Ukraine on February 24 caused economic consequences that affected not only the first months of the year, but we continue to suffer them now and foreseeably in the immediate future. A third factor was the transport strike in mid-March which had a notable impact on supply chains.
"This data confirms more emphatically that the recovery of growth slowed down to almost standstill," says María Jesús Fernández, senior economist at Funcas. From now on, a second quarter is coming in which better data is expected, but after the summer the outlook is already darker, because the fall in the purchasing power of households will have a greater impact on spending, in addition to the effects of the increases of interest and the risk of cuts in gas supplies.
In relation to the advanced data of the INE there are two big changes. On the one hand, the drop in private consumption is much smaller, almost half. It remains at 2% when previously it was expected to be 3.7%. The second major correction is a lower recovery in tourism, in spending by foreigners in Spain. With the advanced data, he assumed that in the first quarter the tourist occupancy levels of the pre-pandemic stage had already been recovered. Now the increase in the final consumption of non-residents remains at 5.2 when the advance data set it at a hefty 21.9%.
"The recovery of tourism from the first advance was spectacular. It did not fit with the arrival of tourists," says María Jesús Fernández.
Precisely, this downward revision of foreign tourism spending also causes a reduction in the increase in exports, which rose by 1.1%, compared to the previous estimate of an increase that more than tripled this percentage.
On the other hand, the contradiction between GDP growth of only two tenths and an increase in hours worked of 3.2% returns. It is a decoupling that returns after a certain correction in recent quarters and for which no clear reasons can be found.
For its part, the Ministry of Economy has highlighted that growth in the first quarter is similar to that of Germany and higher than that of Italy and France. It considers that growth is maintained in a context of uncertainty. It also highlights that investment in capital goods has intensified, reaching 9.1%, and that household consumption has been revised upwards.
When the advance data for this first quarter was known on April 29, which set a growth of three tenths now reduced to two, it coincided with the government's review of its macroeconomic forecasts. The executive reduced this year's growth to 4.3%, a forecast that is still above the last one provided by the Bank of Spain, which leaves it at 4.1% and sets the recovery of the pre-pandemic levels of the GDP to the second half of 2023.
Some growth forecasts that remain pending if an effective control of inflation is achieved, as the government will try to renew and extend tomorrow the shock plan against the increase in prices; and they are also subject to the impact of the tightening of the monetary policy that the ECB is adopting, and of course, everything is highly conditioned by the war and its economic derivatives.
