Domestic demand contributed 2.8 percentage points to annual GDP growth, 1.1 percentage points higher than in 2023, and external demand contributed 0.4 points, six tenths more than in the previous year. The INE reveals, however, that, on a quarterly basis, external demand had a negative contribution of 0.4 points in the last three months of the year.

The Spanish economy expanded 0.8% in the fourth quarter of 2024, similar to the rate in the third quarter and beating the 0.6% forecast, according to preliminary estimates, thanks to a 1.2 percentage point contribution from domestic demand.

Household consumption has been recovering with the slowdown in inflation and the increase in wages, which have risen by around 5% on average. Furthermore, the Spanish Executive chose to maintain support aimed at mitigating the impact of prices. The 8.5% increase in pensions also contributed to the good performance of domestic demand, which also led to a slight increase in savings.

Record tourism figures still helped the economy grow, despite the sharp rise in prices. But also the number of immigrants, which has compensated for the decrease in population and satisfied the need for labor. According to the Active Population Survey, released by IBGE on Tuesday, of the 468 thousand jobs created last year, only 59 thousand were filled by nationals. 88% of jobs created are due to foreign workers or workers with dual citizenship.

The value of GDP at current prices for the whole of 2024 was 1,593,136 million euros, i.e. an increase of 6.3% compared to 2023.

In December, the Bank of Spain had improved its economic growth forecasts for 2024 and 2025 by three tenths, estimating GDP increases of 3.1% and 2.5%, respectively. A decision justified by the good performance of the activity in the second half of 2024, in particular, private and public consumption.

In the fourth quarter, public administration expenditure grew by 0.4% and gross capital formation (investment) increased by 2.8%. The evolution of public consumption, particularly in the autonomous communities, can be explained by the dynamism of public revenues due to inflation.

The Spanish central bank highlighted that GDP growth in 2024 and 2025 is essentially supported by domestic demand and, above all, private consumption, due to the positive evolution of disposable income, the labor market, household confidence and the expected increase in population .

The European Commission also improved its GDP outlook in November, predicting that Spain would grow 3% in 2024 and 2.3% this year.