The INE confirms 0.6% growth in the first quarter and the loss of momentum in the economy.

Following the recent forecasts published by the Bank of Spain, which estimated Gross Domestic Product (GDP) growth of 2.4% for this year and 1.8% for 2026, data published this Wednesday by the INE confirm a slowdown in economic growth during the first quarter of the year. GDP registered a 0.6% variation in the first quarter compared to the previous quarter in terms of volume, one tenth less than in the last quarter of 2024. In year-on-year terms, the pace of economic growth has slowed from 3.3% at the end of the last quarter of 2024 to 2.8%, weighed down by the fall in public consumption, as confirmed by the INE in the "Spain's Quarterly National Accounts" data for the first quarter of 2025.

Domestic demand contributed 0.5% to quarterly GDP growth, a slight upward revision to domestic demand, rising by 0.1% compared to the 0.4% estimated in the provisional data published in April. In contrast, the foreign sector contributed 0.1%, not 0.2% as the INE had estimated.

In year-on-year terms, and in line with Escrivá's statements published by this newspaper regarding the lower contribution of the foreign sector as a justification for the decrease in economic growth forecast by the Bank of Spain for the current year, only domestic demand contributed to the 2.8% growth, contributing 3.2 points compared to the -0.4 of external demand.

Given these figures, the Ministry of Economy has concluded that "Spain maintained strong growth in the first quarter of the year, supported by private consumption, investment in capital goods, and the rebound in construction."

The department led by Carlos Cuerpo highlights that Spain's growth figures are higher than those of major European countries, such as Germany, with a 0.4% increase, and France, with a 0.1% increase. However, the slowdown in one of the factors—public administration consumption—that best explained our country's differential growth compared to its European counterparts entails a certain slowdown in economic growth .

In this regard, public administration final consumption expenditure showed a negative rate of 0.4%, compared to the initially estimated increase of 0.2%; while household expenditure increased by 0.6%, two-tenths of a percentage point higher than the estimate made in April.

Meanwhile, investment (gross capital formation) registered a 0.9% increase . While this component of GDP is certainly growing, it also remains at very low levels despite the positive impact that European funds should have reflected. Thus, analysts expect the contribution of public consumption to decrease and that of investment to increase, although they also assert that the data indicate a very moderate expansion of investment.

Within external demand, the downward revision is mainly due to increased imports of goods , which increased by 0.9% as a result of the boost in domestic demand.