Household consumption has driven the economy in the first quarter of the year, allowing GDP growth of 0.6%, which represents a moderation compared to the pace at which activity closed in 2025, although more limited than expected. Where analysts pointed to a GDP increase of four or five tenths, it has finally been six, according to data published this morning by the INE. Therefore, it remains below the 0.8% growth of the last quarter of last year.
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It is domestic demand that has pushed activity and especially household consumption, with an increase of 0.6%, which remains below, but not far from, the 0.9% recorded at the end of last year. Meanwhile, public spending remains at low levels, at 0.2%.
Investment data also show a quarterly increase of 0.4%, although this increase is much lower than that recorded in recent quarters, when it exceeded 2%. Here the slowdown is considerable.
Thus, consumption and investment summarize the behavior of the quarter, showing that they continue to drive economic activity but are progressively losing strength. Their evolution coincides with the overall result of the quarter; the economy is slowing down but still at a considerable pace.
What is also true is that the most complicated test is still missing, the impact of the war in Iran. In these three months, the effects are still limited on GDP, since the war only affected March and will be felt more strongly from this period onwards. It will depend both on the evolution of the conflict and on whether the Government maintains or even increases measures to cushion the shock, such as the reduction of VAT on fuels. Measures in force in principle until the end of June.
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In the year-on-year calculation, the economy grew by 2.7%, which, in this case and unlike the quarterly calculation, represents a tenth above that of the fourth quarter of 2025.
Today’s INE figures are the third macroeconomic data of the week. The first two were bleak. First, there was an EPA that showed employment evolution in the first quarter worse than usual for this time of year, which is saying something; and then it was followed by an inflation of 3.2% in April, very high, but two tenths below the previous month. Now comes the confirmation of this moderation in growth, but remaining at high levels, the aforementioned 0.6%.
Thus, the year starts with a guarantee and a great risk. The guarantee is the strong growth with which 2025 closed, 2.8%, and also with a strong finish, which gives it a carry-over effect of more than one point for this year. The future risk is logically the war and its derivatives, with an impact on GDP difficult to predict. The Government has chosen to maintain its forecast of 2.2% growth in 2026 as the central scenario, but adding that it foresees a potential negative impact of up to four tenths.
The First Vice President and Minister of Economy, Carlos Cuerpo, has stated that the data published today show “solid growth supported by household consumption and business investment,” adding that the Spanish economy maintains the growth momentum in a year start marked by the war in Iran.
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