Spain’s dynamic economy withstood the turmoil unleashed by the Middle East war to post 0.6% growth in the first quarter (Q1), in line with expectations, official data showed today.
The spike in energy prices and inflation triggered by the conflict has sparked fears for the world economy, with the Bank of Spain warning last month of a potentially “significant slowdown”.
However, the growth figure for January-March announced by the National Statistics Institute (INE) is consistent with a forecasted expansion of 2.3% in 2026.
“The Spanish economy is maintaining its growth rate in a start to the year marked by the war in Iran,” economy minister Carlos Cuerpo said in a video shared with the media.
“We continue to lead among the EU’s major economies, notably thanks to household consumption and business investment,” Cuerpo added.
Iran closed the Strait of Hormuz, a vital waterway for Gulf oil and gas exports, following US-Israeli strikes that triggered the war in February, roiling global energy markets.
However, the leftist government has predicted that Spain will be less impacted than many of its European neighbours, thanks to its investment in renewable energy and a diversified energy supply.
Renewable power makes up around 55% of Spain’s energy mix, while the country imports most of its crude oil from the Americas and Africa.
The government also put in place measures worth €5 billion (US$5.9 billion) to cushion the blow of the war on households and businesses, including tax cuts and a direct subsidy for the hardest-hit sectors.
Inflation cooled in April to 3.2% as electricity prices fell, even if fuel costs increased, according to a first estimate released on Wednesday by the INE.
The Spanish economy has been outshining developed peers for years, supported by lower energy costs, domestic consumption, and a rebound in tourism following the end of the Covid-19 pandemic.
Last year, it posted one of the fastest growth rates in the EU with 2.8%.
