In terms of volume, GDP increased by 0.8% in the third quarter compared to the previous quarter. This rate was similar to the rate for the second quarter of 2024.
Domestic demand contributed about 0.9 points to quarterly GDP growth. On the other hand, external demand contributed -0.1 points.
Through demand aggregates, final consumption expenditure of households grew by 1.1% and public administrations by 2.2%. On the other hand, gross fixed capital formation recorded a variation of -0.7%.
Exports of goods and services recorded a quarterly rate of 0.9%, ten times higher than the second quarter. At the same time, imports showed a 1.2% variation, up six-tenths compared to the previous quarter.
On the supply side, all large sectors showed positive rates of their value added, with the exception of construction. Consequently, industrial branches grew by 0.2% quarter-on-quarter. Among them, the manufacturing sector eased its growth rate by 1.5 points compared to the previous quarter, to a growth of 0.1%.
Services growth slowed by a tenth, to 1.1%. At the same time, initial branches recorded a quarterly variation of 0.5% compared to -2.8% in the previous quarter.
Construction’s gross value added decreased by 1.4% q/q, resulting in a 2.0-point decrease from the previous quarter.
GDP Third quarter of 2024
The annual change in GDP was 3.4% for the quarter, ten points higher than the previous quarter. Domestic demand contributed 2.7 points to year-on-year GDP growth. On the other hand, external demand contributed about 0.7 points.
In terms of totals, final consumption spending accelerated by about four-tenths compared to the previous quarter and rose 3.3% year-on-year. Household spending increased by about three-tenths to 2.8%, and spending in the public sector increased by 4.7%, which is about seven-tenths higher than the previous quarter.
Market Reactions to Spain’s Quarterly Spot GDP
The first point of influence is the immediate reaction in the currency markets. After the release of GDP figures, the euro has fluctuated against major currencies. A stable growth rate of 0.8% suggests that Spain’s economy is resilient, especially in the face of potential economic headwinds such as inflation and geopolitical tensions.
Investors often interpret strong economic data as a signal in favor of the euro, leading to increased demand. This could strengthen the euro against other currencies, which is essential for Spanish exports to be competitive. However, if the euro strengthens too much, it could lead to concerns about the export sector, which could ultimately weigh on growth in the coming months.
In addition to currency fluctuations, GDP growth figures affect the performance of the stock market. Spanish stocks, especially those in cyclical sensitive sectors such as consumer goods, financial services and industrials, often react positively to favorable GDP data.
A growth rate of 0.8% provides a solid foundation for corporate profits, which is likely to inspire investor confidence. As a result, we may see a rise in the share prices of Spanish companies, especially those that rely heavily on domestic consumption and investment. Conversely, if the expected growth rate (0.6%) is achieved, it has raised concerns about slowing growth, leading to a more cautious approach by investors.
The effects of Spanish GDP figures extend far beyond immediate market reactions. For policymakers, steady growth at 0.8% is both a challenge and an opportunity. The challenge is to address underlying issues that may threaten this growth, such as high inflation and labor-market inequalities. However, the opportunity lies in capitalizing on this momentum to implement structural reforms aimed at boosting productivity and competitiveness.
Spanish Quarterly Spot GDP and the current month’s forecast
Looking ahead, the outlook for the current month is cautiously optimistic, although many factors may influence the outlook. Analysts expect GDP growth to stabilize around the previous figure of 0.8%, driven by strong consumer spending and investment. However, external factors such as global supply chain disruptions, rising energy prices, and inflationary pressures may pose risks. The ongoing conflict in Ukraine and its repercussions on energy prices remain a major concern for the euro zone, especially Spain, which is vulnerable to energy price shocks. So, while the immediate outlook looks positive, many uncertainties remain.
Market analysts will be closely monitoring economic indicators in the coming weeks, such as consumer confidence, retail sales, and employment figures, to gauge the sustainability of the current growth trajectory. These figures will provide further insight into the health of the Spanish economy and its ability to maintain its current growth rate. If consumer confidence remains high and retail sales continue to rise, it could strengthen the case for sustainable growth. However
Therefore, any signs of an economic slowdown may lead to a reassessment of the outlook, affecting investor sentiment and market dynamics.
Spanish policymakers can use these positive data to justify continued investments in infrastructure, technology, and education, which are critical to long-term economic stability. Moreover, the ECB may take these figures into account when considering its stance on monetary policy, which could affect interest rates and other economic measures across the Eurozone.
As markets look into this month, the focus will shift to different economic indicators that could affect the sustainability of this growth path. The interaction between domestic economic performance and external factors will be crucial in shaping the outlook for the future and overall stability of the Eurozone economy.