(Reuters) – Spain’s economy grew by 0.1% in the third quarter, revised data showed no Friday, a sharp slowdown in growth compared to the 2.0% recorded in the previous three-month period, the National Statistics Institute (INE) said.
Final data for the quarter showed weakness of domestic demand during the summer months was compensated for by solid exports and robust tourism, a sector that has recovered to near pre-pandemic levels.
Spain’s GDP was also being sustained by good employment data, a rare occurrence in the country where slowdowns are usually accompanied by massive job losses.
High inflation, which has averaged 8.5% this year due to the impact of Russia’s invasion of Ukraine, has reduced the rate of growth in household consumption to 0.1% from a previous 1.7%.
However, the latest forecast revisions by the Bank of Spain and international organisations such as the IMF do not include a winter recession in their central scenarios.
The GDP data for the third quarter was revised down from the preliminary reading of 0.2% growth published two months ago. Nevertheless, year-on-year growth in the third quarter of 4.4% was up from the preliminary figure of 3.8%.
The INE also revised quarterly GDP data for the second quarter to a 2.0% expansion from a previous expansion of 1.5% and the yearly GDP figure for the same quarter to 7.6% growth from a previous 6.8% growth.
Investment fell sharply in the construction sector, and activity in industry and housing declined from the previous quarter.
The government said earlier this week that economic growth in 2022 could surpass its own forecast of 4.4%, with most analysts expecting annual growth to reach 4.6%.
For 2023, the government expects growth of 2.1% compared to the 1.3% growth forecast by the Bank of Spain.
(Reporting by Belén Carreño and Marta Serafinko, editing by Toby Chopra and Jon Boyle)
