The Spanish economy grew by 2.5% in 2023, one-tenth of a percentage point more than expected by the government. This was after recording a quarterly increase of 0.6% in the last quarter of the year, two-tenths of a percentage point more than in the previous quarter, according to the advance of the National Accounts published by the Spanish Statistics Institute (INE).
The Spanish economy, therefore, achieved its third consecutive year of annual growth in 2023, although last year's was the most moderate over this period: in 2021, GDP advanced by 6.4%; in 2022, it grew by 5.8%, and now the momentum has eased to 2.5%. These three years of growth follow the historic 11.2% decline in GDP caused by the coronavirus outbreak.
Domestic demand contributed 1.7 points to GDP growth in 2023, 1.2 points lower than in 2022, while foreign demand contributed eight-tenths of a point, 2.8 points lower than in the previous year. At current prices, GDP stood at €1,462.07 billion in 2023, 8.6% higher than in 2022.
In year-on-year terms, GDP in the fourth quarter of 2023 grew by 2%, one-tenth of a percentage point more than in the previous quarter (1.9%), solely due to domestic demand, as the foreign sector made a zero contribution.
In inter-quarterly terms, the Spanish economy stepped on the accelerator in the last quarter of the year, growing by 0.6%, two-tenths of a percentage point more than in the previous quarter. Of this percentage, 0.5 points were contributed by national demand and one-tenth of a point by foreign demand.
According to Statistics, hours worked increased by 2.8% year-on-year in the fourth quarter of last year and employment, measured in terms of full-time equivalent jobs, rose by 3.9%.
Leading growth among large euro economies
At the end of last year, Spain confirmed its position as the Eurozone's fastest-growing major economy, both in the fourth quarter and for the year as a whole, after the German, French and Italian statistical offices published their first data on the evolution of their respective economies in the final stretch of 2023.
Spain's gross domestic product (GDP) expanded faster between October and December to 0.6% from 0.4% in the third quarter, while Italy, the Eurozone's third-largest economy, recorded an expansion of 0.2%, up from 0.1% in the previous three months.
Meanwhile, the Eurozone's two largest economies showed further weakness. France stagnated in the fourth quarter, maintaining activity stagnation in the previous three months. Germany recorded a contraction of 0.3% between October and December, following stagnation in the third quarter.
On average, for 2023, as a whole, Spain's GDP grew by 2.5%, France's economy expanded by 0.9%, and Italy's by 0.1%. In Germany, the GDP of Europe's largest economy contracted by 0.3%.
Outside Europe – on the other side of the Atlantic – GDP in the United States expanded by 0.8% in the fourth quarter, moderating by 0.4 percentage points from the 1.2% growth in the third quarter. In 2023 as a whole, the world's largest economy recorded growth of 2.5%, six-tenths of a point above the 1.9% expansion in 2022, despite the Federal Reserve (Fed) tightening its monetary policy.
In the case of China, GDP would have expanded by 5.2% in 2023 as a whole, accelerating substantially from the 3% growth in 2022, when the world's second-largest economy was held back by measures implemented to contain COVID-19.
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