Business sentiment remains buoyant
The European Commission's economic sentiment index has been rising for three months (103.8; +0.4 points m/m), driven by an improvement in industry (-4.2; +1.3 pt). Indices of production expectations for the months ahead and of stocks of finished products are improving.
Household consumption: less dynamic, but still a driving force for growth
Household consumption rose by 0.4% q/q in Q1, compared with 0.8% in Q4. New car registrations stagnated (+0.0% 3m/3m), suggesting that households are postponing major purchases.
The unemployment rate rose slightly (11.4% in Q1; +0.8pp q/q)
As is the case every year, the number of workers employed fell (-92,500 q/q to 21.8 million) as a result of reduced seasonal demand in the services sector. At the same time, the proportion of foreign workers among those in employment continues to climb (15.5%) and negotiated wages to rise (+3.3% y/y in March).
Inflation is approaching 2%
Harmonised inflation (HICP) held steady at 2.2% y/y in April. Core inflation rebounds (2.4%; +0.4pp m/m) and rises above HICP for the first time in six months. The outlook remains favourable, with the monthly change in the producer price index falling back into negative territory (-3.9%) for the first time since September 2024.
Spanish growth will slow further in Q2 and Q3
After moderating slightly in Q1 2025 (+0.6% q/q compared with +0.7% q/q in Q4 2024), Spanish growth will slow further in Q2 and Q3 (+0.5% q/q) but will still remain well above that of the Eurozone. It will pick up again in Q4 (0.6% q/q). On an annual average, it should reach 2.5% in 2025 (compared with 1.1% in the Eurozone).
Article completed on 2 May 2025
