Spanish economy loses steam and moderates growth to 0.6% in first quarter

The Spanish economy grew in the first quarter of the year, but less than at the end of 2025. Amid the war in Iran, GDP advanced by 0.6% thanks to the boost from domestic demand, but 0.2% below the previous quarter, according to the national institute of statistics (INE).

Behind this loss of steam lies lower household consumption, which moderated by three tenths of a point to 0.6%, and investment, which also slowed, growing its worst figure since the third quarter of 2024 (0.4%).

Meanwhile, public spending accelerated by three tenths of a point to 0.5% and spending by non-profit organisations advanced 1.4 points to show growth of 2%.

All sectors of activity experienced quarterly growth, except for construction, which stagnated. Agriculture led the increase, with a 3.3% rise, followed by services (+0.8%) and industry (+0.3%).

With this first-quarter growth, the Spanish economy has now seen 23 consecutive quarters of growth.

On an annual basis, GDP accelerated at a rate of 2.7%, one tenth above the fourth quarter of 2025, thanks to domestic demand, which contributed 3.5 points to growth, while external demand subtracted 0.8 points.

"The measures the government approved on 20 March are mitigating the damage of this new energy shock on households and businesses," the Ministry of Economy said.

The ministry also stated that GDP figures confirm that Spain maintains its "leading position among the main economies of the Eurozone".

Another "good sign" the data shows is the quarterly advance of 1% shown by productivity per hour worked, "the best figure since the start of 2025", and its year-on-year growth of 0.6%, "consolidating an unusual cycle of increased productivity and record job creation".

Employment, measured in full-time jobs, according to statistics, grew by 2.8% through to March, the same as in the previous quarter, while hours worked grew by 2.1% year-on-year, one tenth more than in the previous quarter.

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