Spain’s economy grew 5.5% in 2022 after faster-than-expected last quarter

By Belén Carreño

MADRID (Reuters) -Spain’s gross domestic product grew a faster-than-expected 5.5% in 2022 as the country avoided a recession in the final quarter despite fears of a global slowdown, official data showed on Friday.

Spain’s GDP grew 0.2% in the fourth quarter from the previous quarter and 2.7% from the same quarter in 2021, the National Statistics Institute said on Friday.

Public spending drove the economy in the last quarter of the year, compensating for a contraction in private consumption and allowing Spain to notch a seventh consecutive quarter of growth.

Analysts polled by Reuters had forecast 0.1% quarter-on-quarter growth and 2.2% year-on-year expansion.

The final GDP data beat both the original official forecast for the year, which was 4.5%, and the 5% anticipated by Prime Minister in late 2022. The statistics agency also revised up previous quarters.

Madrid expects GDP growth will slow to 2.1% in 2023, though many analysts expect a sharper slowdown.

Unemployment data released on Thursday showed a rise in the jobless rate in the last three months of 2022 as employers anticipated a slowdown.

Spain has already received 31 billion euros ($33.69 billion) of European recovery funds, which started to flow into the economy in the last quarter.

Exports, one of the driving forces of the Spanish economy in 2022, came to a screeching halt in the fourth quarter as the global economy slowed. Retail, hotels and restaurants also ended their growth streak.

The Spanish economy shrunk 11.3% in 2020 when the pandemic shut down tourism, and the economy has not yet fully recovered to pre-Covid levels.

($1 = 0.9202 euros)

(Reporting by Belén Carreño and Marta Serafinko, editing by Inti Landauro and Christina Fincher)