MADRID (AFP) – Spain’s economy returned to pre-pandemic levels during the first quarter as it grew more than previously estimated, official data showed on Friday, boosting the government ahead of snap polls.
Gross domestic product (GDP) expanded by 0.6 per cent from January to March from the previous three months, national statistics institute INE said, upgrading the first quarter rate from a preliminary estimate of 0.5 per cent.
“We have recovered the level of our pre-pandemic GDP,” Economy Minister Madia Calvino said in a video message, adding growth had picked up in the first quarter because Spanish firms had improved their competitiveness.
Spain was the European country hardest hit by the COVID-19 pandemic, with its GDP falling by 10.8 per cent in 2020 as COVID-19 travel restrictions hit its key tourism sector hard.
But a global rebound in tourism has allowed the Spanish economy to resist the slowdown sparked by the invasion of Ukraine better than most of its neighbours. Spanish GDP in the first three months of 2023 grew 4.2 per cent from a year earlier, up from its previous estimate of 3.8 per cent.
By comparison the euro area was in a technical recession in the first two quarters of 2023.
The statistics office said growth in the first quarter was fuelled by a 5.7 per cent increase in exports in the first quarter, after falling one per cent in the final quarter of 2022, and a 1.8 per cent increase in business investment.
This offset a 1.3 per cent fall in household consumption as rising prices led people to curb spending in the eurozone’s fourth-biggest economy.
The Bank of Spain on Monday revised its economic growth forecast for 2023 from 1.6 per cent to 2.3 per cent as activity picked up more than expected at the start of the year, with energy costs easing and tourist visits on the rise.
Socialist Prime Minister Pedro Sanchez is making Spain’s good growth figures a central plank of his campaign to be re-elected in a general election on July 23.
“Spain’s growth is speeding up,” he tweeted after the first quarter GDP figures were published.
