The Spanish economy's post-pandemic recovery momentum showed signs of moderation in the second quarter, with official data confirming a slowdown in Gross Domestic Product (GDP) growth. The figures align with preliminary estimates, painting a picture of an economy grappling with persistent inflationary pressures and global economic headwinds.

Confirmed Slowdown Amidst Global Uncertainty

The National Statistics Institute (INE) released its second estimate, affirming that GDP growth decelerated to 0.4% quarter-on-quarter, down from 0.5% in the first three months of the year. On an annual basis, the economy expanded by 1.8%, a noticeable cooling from previous quarters. This confirmation eliminates any speculation of a last-minute upward revision and solidifies the trajectory of Spain's economic normalization.

Key Factors Behind the Moderation

Analysts point to several contributing factors to the slowdown:

  • High Inflation: Although easing, elevated consumer prices continue to erode household purchasing power, dampening domestic consumption.
  • External Demand: Weaker economic activity in key European trading partners has impacted export growth.
  • Interest Rates: The European Central Bank's restrictive monetary policy, aimed at curbing inflation, is weighing on investment and credit-sensitive sectors.

The data suggests that the robust rebound driven by pent-up demand and tourism has now entered a more mature, and potentially more fragile, phase.