The Spanish economy closed the year of the war in Ukraine and the energy crisis with a growth of 5.5%, as confirmed this Friday by the National Institute of Statistics, which advanced the data in January. After a first and second quarter of strong growth, the price increase began to affect consumption and investment from the second half of the year and the economy slowed down. In the fourth quarter, GDP registered an increase of 0.2% compared to the previous quarter and 2.6% in interannual terms. This rate is one tenth less than that advanced by the INE in January and is 2.1 points lower than that of the third quarter. All in all, the feared drop in GDP in the final stretch of the year that many economists predicted was avoided.

Inflation made a dent in the final stretch of the year, especially in national demand, which contributed to year-on-year GDP growth with 0.6 points, 2 points less than in the third quarter. The worst part was taken by household spending, which grew at an interannual rate of 2.6%, which is 2.2 points less than in the previous quarter. For its part, final consumption spending by Public Administrations recorded growth of 1.9%, 3.7 points higher than that of the previous quarter.

In the year as a whole, national demand contributed 2.8 points to GDP growth, 2.4 points less than the previous year. For its part, external demand contributed 2.6 points, 2.3 points more than in 2021.

For its part, the foreign sector maintained its growth: external demand contributed 2.1 points to year-on-year growth, one tenth lower than that of the previous quarter. Exports of goods and services registered a rate of 7.6% compared to the fourth quarter of 2021, which is 7.1 points less than in the previous quarter. The slowdown, explains the INE, was produced mainly by exports of services (from 51.5% to 13.9%) partially offset by the increase in the interannual rates of exports of goods (from 2.7 to 5, 6%).

Investment also collapsed at the end of the year, after the successive rises in interest rates by the European Central Bank to curb inflation, which has made borrowing more expensive and weakened growth prospects. Gross capital formation registered a fall of 5.5%, 7 points lower than that of the previous quarter. Among its components, investment in housing went from growing 6.4% to 4.1%, while investment in machinery, capital goods and weapons systems fell by 0.9%, 5.8 points less.

With growth of 5.5% in 2022, the Spanish economy chained its second consecutive year of GDP growth, after the advance of 5.5% in 2021 and which meant a return to growth after the historic drop in GDP of 11.3 % in 2020 due to the coronavirus pandemic and the lockdowns that paralyzed the economy.

Regarding employment, the National Accounts report indicates that in year-on-year terms, hours worked increased by 2.7%, five tenths less than in the third quarter of 2022. Full-time equivalent positions grew by 2%, eight tenths less than in the third quarter, which represents an increase of 386,000 full-time equivalent jobs in one year.

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