FX.co ★ Spanish Economy Grows As Estimated In Q2; Inflation Lowest Since March 2021

Spain's economic growth remained robust in the second quarter, in line with initial estimates, while consumer price inflation significantly declined to its lowest point in three-and-a-half years in September, as reported by the National Statistics Institute (INE) on Friday.

The Gross Domestic Product (GDP) grew by 0.8 percent quarter-on-quarter, a slight deceleration from the revised 0.9 percent increase observed in the first quarter.

Annual economic growth accelerated to 3.1 percent, up from 2.5 percent in the previous period. This latest figure aligns with preliminary estimates, although the first quarter's growth was slightly revised down from an initial 2.6 percent.

From an expenditure perspective, household consumption and government spending rose by 1.0 percent and 0.7 percent, respectively. Gross fixed capital formation increased by 0.3 percent. External demand positively contributed 0.1 percent, as export growth outpaced that of imports.

Consumer price inflation in Spain eased to 1.5 percent in September, down from 2.3 percent in August. This marks the lowest inflation rate since March 2021, when prices increased by 1.3 percent.

The decline in inflation was primarily driven by a reduction in fuel prices and, to a lesser extent, decreasing prices for food and electricity, according to the agency.

Core inflation, which excludes volatile items such as unprocessed food and energy, moderated to 2.4 percent from 2.7 percent the previous month, as indicated by preliminary data.

Inflation based on the Harmonized Index of Consumer Prices (HICP) dropped to 1.7 percent in September from 2.4 percent in August.

On a month-to-month basis, consumer prices fell by 0.6 percent, while the HICP slightly declined by 0.1 percent.