MADRID: Spain’s economy returned to pre-pandemic levels during the first quarter as it grew more than previously estimated, official data showed Friday, boosting the government ahead of snap polls.
Gross domestic product (GDP) expanded by 0.6 percent 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 percent.
“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 percent 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 Russia’s invasion of Ukraine better than most of its neighbours.
Spanish GDP in the first three months of 2023 grew 4.2 percent from a year earlier, up from its previous estimate of 3.8 percent.
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 percent increase in exports in the first quarter, after falling 1.0 percent in the final quarter of 2022, and a 1.8 percent increase in business investment.
This offset a 1.3 percent 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 percent to 2.3 percent 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, adding job creation remained “dynamic” with 426,000 full-time jobs created in the first three months of the year.
The government has forecast 2.1 percent growth for this year.
Sanchez called the early elections after his party and its junior coalition partners, far-left Podemos, suffered a drubbing in regional and local elections on May 28.
Polls suggest the main opposition conservative Popular Party will win the next general election but will need the support of Vox to form a working majority in parliament.
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