July 21, 2024 | 12:53

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The Basque economy grows 1,7% in the first quarter, exceeding forecasts

Mairenis Gomez

June 7, 2024 | 7:00 pm

This increase is reflected in the creation of more than 19.000 jobs and a notable improvement in key sectors such as services and construction.

The economy of Euskadi has surprised with higher-than-expected growth in the first quarter of this year. The Gross Domestic Product (GDP) grew by 1,7% compared to the same period in 2023, one tenth more than estimated until now. These data, published by the Basque Institute of Statistics-Eustat, reflect a more favorable economic situation than was anticipated.

Euskadi maintains employment growth measured in full-time jobs

During the first three months of the year, The Basque economy generated more than 19.000 jobs, which represents an increase of 0,5% compared to the previous quarter and 2% year-on-year. These data corroborate the forecasts advanced by Eustat at the end of April, which already indicated a positive trend in employment and GDP.

The year-on-year comparison is also positive, with a growth of 1,6% in the GDP of Euskadi and 0,5% compared to the last quarter of last year. This increase is now improved, as GDP finally grew by 0,6%. This places the Basque economy in a robust position, although seven tenths below the estimated growth for the Spanish economy as a whole.

The promotion of services and the industrial sector in the Basque economy

The economic growth of Euskadi is largely due to the services sector, which had a year-on-year growth of 2,2% and 0,3% quarter-on-quarter. Within this sector, commerce, hospitality and transport grew by 1%, while public administration, education, health and social services increased by 3,2%. The rest of the services, which include real estate, professional, financial and insurance activities, grew by 2,4%.

Construction also saw notable growth, increasing 2% year-on-year and 0,9% quarter-on-quarter. On the other hand, the primary sector was the only one that presented a negative evolution, with a decrease of 0,5% compared to the previous year, although it grew by 5,4% in quarter-on-quarter terms. The industry, although with more modest growth, increased by 0,1% compared to the same quarter last year and 1,1% compared to the last three months of 2023. The manufacturing industry, in particular, showed better performance with a growth of 0,4% year-on-year and 1,5% quarter-on-quarter.

Increase in household consumption and investment

Household consumption in the Basque Country between January and March of this year was 1,7% higher than that of the same period in 2023 and 0,9% higher than that of last winter. This growth is four tenths higher than that estimated by the Basque Government in its latest macroeconomic forecasts. For its part, public administration consumption grew by 2,6% year-on-year and 0,6% quarter-on-quarter, also exceeding initial forecasts.

In addition, Investment also showed a positive evolution, with a growth of 1,3% both in year-on-year and quarter-on-quarter terms.. Investment in capital goods grew by 0,2%, while in the rest, linked to the evolution of construction, growth was 2%. However, the contribution of foreign trade was negative, with a decrease of 3,7% in exports and 3,4% in imports.

This growth highlights the economic strength of the region.

More than 19.000 net jobs created in the last year

The evolution of employment has been positive, with the creation of more than 19.000 net jobs in the last year. This translates into year-on-year growth of 2% and 0,5% compared to the previous quarter. The year-on-year evolution of employment was positive in all branches of activity, except in the primary sector, which registered a decline of 0,7%. The promotions were 1,1% in industry, 0,3% in construction and 2,4% in services.

In short, the Basque economy has shown notable solidity in the first quarter of the year, with GDP growth higher than expected and significant job creation. These results reflect a positive and resilient trend that lays a solid foundation for the region's economic future.

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