INE preliminary data shows Spain’s growth slows to 0.4% in 2Q23, while inflation rises to 2.3% in July

España economia

The Spanish economy grew by 0.4% between April and June compared with the previous quarter, one tenth of a percentage point less than in the previous quarter, while its year-on-year rate eased by more than two points, from 4.2% in the first quarter to 1.8% in the second, due to the lower contribution of the foreign sector.

According to the advance National Accounts data published on Friday by the National Statistics Institute (INE), economic activity was boosted in the second quarter of the year by both consumption and investment, as opposed to the decline in exports and imports.

Specifically, household consumption grew by 1.6% between April and June after two negative quarters, while public spending rose by 1.5%, compared with a fall of 1.6% in the previous quarter.

The Consumer Price Index (CPI) rose by 0.1% in July compared with the previous month and increased its year-on-year rate by 0.4 percentage points to 2.3%, mainly due to the rise in fuel prices and package holidays.

With July’s rise, inflation resumed its upward trend and put an end to two consecutive months of falls that took the CPI to 1.9%, its lowest level since March 2021, according to advanced data published on Thursday by the National Statistics Institute (INE).

In addition to the rise in fuel prices and package holidays, Statistics has attributed the upturn in the CPI in July to the fact that the prices of clothing and footwear have fallen less than they did in the same month of 2022.

On the contrary, the INE stresses that electricity and gas prices fell in July, compared with the rise in the same month last year.

The body includes in the CPI advance data an estimate of core inflation (excluding unprocessed food and energy products), which in July rose by three tenths of a percentage point to 6.2%, almost four points above the general CPI.

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