Spain's household consumption, industry drive GDP growth in first half of 2024

By Belén Carreño

(Reuters) -The Spanish economy showed strength compared to peers in the first half of the year, with growth of 0.9% in the first quarter and 0.8% in the second quarter, according to revised data published on Friday by the National Statistics Institute (INE).

The revision brought the annual growth rate up to 3.1%, in line with the government's upward revision of 2.7% for the year, following successive revisions by public and private organisations.

Analysts expected growth of 2.9%, according to a Reuters poll.

In contrast, euro zone peers grew 0.3% in the second quarter of the year and the outlook for 2024 is at 0.8%.

Contrary to the weakness seen in other euro zone countries, the Spanish economy showed its resilience to interest rate hikes, with private consumption rising by 1%, contributing to the improvement in domestic demand.

Investment grew by only 0.3% on a quarterly basis, despite the deployment of European Union recovery funds.

Services were a strong driver of the economy in the second quarter, with hotels and restaurants growing by 2.6%.

But industry also improved its performance, particularly manufacturing, which grew by 1.5% quarter-on-quarter as it benefitted from falling energy prices and gained competitiveness against other EU countries.

(Reporting by Belén Carreño in Madrid and Joao Manuel Mauricio in Gdansk; Editing by David Latona and Ros Russell)

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