[PAGE_2]Summary[/PAGE_2]
[PAGE_5]Recent economic trends[/PAGE_5]
[PAGE_13]Risks[/PAGE_13]
[PAGE_14]The scenario in figures[/PAGE_14]
 

Ticiano BRUNELLO

Headline inflation fell in September to 1.5% yoy (2.3% in August). The decline resulted primarily from lower carbon inflation, although growth also slowed in the prices of food, electricity and leisure and cultural goods and services. Core inflation fell three-tenths to 2.4% in September. These data point to a further drop in inflation on processed foods, pursuing the trend observed in recent months. Services inflation, however, has remained above 3.5% since the beginning of the year.

Ticiano
 
BRUNELLO
Economist

The Spanish economy continued to grow robustly at the beginning of the year despite an array of unfavourable factors, including the weakness of the Eurozone economies, persistently high inflation, and the impact of the rise in interest rates, which were expected to peak in Q1 2024. The strong performance was driven by positive labour-market momentum, persistently dynamic immigration and sound international tourism data, which once again exceeded expectations and explain the strong contribution of external demand to growth. In the second quarter, private consumption took over as the key growth driver, accelerating for the third quarter in a row. In contrast, investment continues to disappoint, but is improving. 

Data for the second quarter, as well as a slightly more favourable global environment (including the slowdown in the US and China), have led us to revise our GDP growth forecasts upwards to 2.7% for 2024 and 1.8% for 2025. We expect domestic demand to become the key growth driver. The lower contribution from public consumption will be more than offset by a gradual recovery in both private consumption and investment.