The Spanish economy is experiencing steady growth, with a GDP increase of 0.7% at the beginning of the year, which is significantly higher than the European average. Over 65% of this growth can be attributed to the foreign sector, thanks to increased service exports and decreased imports. The remaining 35% comes from domestic demand, with investment rebounding and public consumption slowing down. Family consumption has also benefited from higher labor income.
Despite these positive indicators, there are concerns about whether Spain’s balanced growth can be sustained in the long term. While Spain has made progress in improving its international competitiveness through factors such as access to affordable energy and immigration, external challenges like the energy crisis and geopolitical tensions could negatively impact the economy.
Temporary factors are also affecting demand, with the shift towards services over goods due to the pandemic being a significant trend in Spain. While the services sector has experienced growth, the goods sector, including industry and construction, has declined. However, it is expected that these trends will normalize as consumer preferences stabilize.
Looking ahead, it is crucial for Spain to focus on strengthening its competitive advantages through investment in areas that are particularly relevant in light of rapid technological changes. While investment has shown some growth since pre-pandemic levels, it still needs to increase to support productivity and sustainable economic growth. To achieve a sustainable economic cycle, Spain must promote structural advances and enhance its production model in line with European standards.
In summary, while Spain’s economy continues to show steady growth due to factors such as increased service exports and decreased imports, there are concerns about sustainability in the long term due to external challenges like energy crises and geopolitical tensions. Temporary factors such as shifts towards services over goods due to Covid-19 have affected demand but are expected to normalize soon. To maintain a sustainable economic cycle in Spain’s future prospects require investing in new technologies while promoting structural advances that align with European standards.
