Spain's quarterly GDP growth in Q2 revised up at 0.8% - final data

Spain's National Statistics Institute (INE) reported that the country's second-quarter GDP grew 0.8% quarter-on-quarter, an upward revision from the preliminary 0.7% and exceeding analyst expectations. Annually, Q2 economic output expanded 3.1%, also revised higher from 2.8% and surpassing consensus, indicating stronger-than-anticipated economic momentum for the period.

Analysis

Spain's economic performance in the first half of the year was significantly stronger than previously anticipated, according to revised data from the National Statistics Institute (INE). Second-quarter GDP growth was upwardly revised to 0.8% quarter-on-quarter, surpassing both the preliminary estimate of 0.7% and the analyst consensus. On an annual basis, the Q2 expansion was revised to 3.1%, a notable acceleration from the initial 2.8% reading and consensus forecast. Furthermore, the INE retroactively upgraded Spain's year-on-year GDP growth for the first quarter to 3.2% from 2.8%. These consistent upward revisions across multiple periods indicate a robust underlying momentum in the Spanish economy, defying analyst expectations and suggesting a more resilient economic backdrop than was priced into the market based on preliminary figures.

Key Decisions for Investors

• Investors should consider increasing exposure to Spanish equities, particularly in cyclical sectors that are direct beneficiaries of stronger domestic economic activity.
• The positive GDP revisions improve Spain's sovereign credit profile, suggesting that Spanish government bonds may offer attractive relative value compared to other Eurozone sovereigns.
• Monitor high-frequency forward-looking indicators, such as manufacturing and services PMIs, to determine if this revised momentum is carrying through into the second half of the year before making significant portfolio adjustments.