5Economic structure

The structure of the Spanish economy is that of a developed country, with the services sector being the main contributor to GDP, followed by industry. In 2022, these two sectors represented more than 92% of Spain’s GDP, with agriculture’s share today representing 2.65% of the total GDP, having declined sharply (see Table 4).

Table 4

Having withstood the effects of the Covid-19 public health crisis, GDP continued its growth trend in 2022, after picking up in 2021, although to a lesser extent due to the impact of the Russian invasion of Ukraine in February 2022 and the fall in consumption.

The variation in the quarter-on-quarter GDP growth rate for the fourth quarter of 2022 was 0.2%¹² in terms of volume. Nonetheless, year-on-year growth in GDP amounted to 2.7%¹³, reflecting a sustained recovery of the Spanish economy. The GDP growth rate is expected to remain at similar levels in 2023.

Inflation in Spain had been gradually falling since the end of the 1980s. Average inflation between 1987 and 1992 was 5.8%; it dropped below 5% for the first time in 1993, and it has been shrinking gradually since then. For reference, the year-on-year inflation rate at December 2020 was -0.5%. However, 2021 saw a change in the inflation trend, due mainly to an upsurge in demand following the restrictions introduced as a result of the pandemic, leading to mismatches between supply and demand as a result of shortages of raw materials, particularly energy products, compounded by the invasion of Ukraine in 2022.

This generalized increase in prices was reflected in a year-on-year inflation rate of 5.8% at the end of 2022, driven mainly by the rise in fuel prices. Although inflation remained relatively high with respect to 2021, the drop in electricity prices meant that 2022 ended with a year-on-year inflation rate one percentage point lower than the previous year. This slowdown in the inflation rate is expected to continue for the next few years.

Table 5