Spain's economy still on the up despite US tariff uncertainty

Spain's economic growth accelerated in the second quarter, driven by a rise in exports despite trade tensions sparked by rising US tariffs, preliminary data showed Tuesday.

Gross domestic product in the eurozone's fourth-largest economy rose 0.7 percent in the April-June period from the first three months of the year, the national statistics institute INE said in a statement.

That is up from 0.6 percent gain recorded in the first quarter.

The second quarter growth figure outpaced forecasts from the Bank of Spain, which had projected an expansion of between 0.5 percent and 0.6 percent.

"Spain maintains its momentum and is solidifying its position among the strongest advanced economies," Economy Minister Carlos Cuerpo wrote on social network X.

Spain's economy has been outperforming its peers, recording 3.2 percent growth in 2024 compared with a one-percent European Union average.

Growth in the second quarter was mainly driven by exports, which rose by 1.1 percent compared with the previous quarter, despite trade tensions sparked by rising US tariffs.

Business investment also jumped by 2.1 percent, while household consumption increased 0.8 percent, INE said.

The government forecasts Spain will post full-year growth of 2.6 percent. That is in line with the International Monetary Fund’s latest projection of 2.5 percent, revised upward in April despite the escalating trade tensions.

The US and the EU struck a deal on Sunday that fixes a baseline tariff of 15 percent on exports from the bloc to the United States.

Cuerpo told AFP in June that any US tariffs would have a limited impact on Spain's growth since only around five percent of Spanish exports are US-bound.

"Spain’s exposure to the US economy is comparatively low," he said at the time.

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