The Spanish economy grew by 0.7% quarter-on-quarter in the three months to June 2025, slightly above the 0.6% expansion in the previous quarter and beating market expectations of 0.6%, according to preliminary estimates. Domestic demand contributed 0.9 percentage points to growth, offsetting a 0.1 percentage point drag from the external sector. Household spending increased by 0.8%, while gross fixed capital formation surged by 2.1%. In contrast, government expenditure declined by 0.1%. On the external front, exports rose by 1.1%, while imports climbed 1.7%. On the production side, industrial output grew by 0.8%, driven by a 1.1% increase in manufacturing. The services sector expanded by 1.2%, and construction activity rose by 1.5%. However, the primary sector contracted sharply, falling by 9.5%. On an annual basis, the Spanish economy expanded by 2.8%, matching the growth rate from the previous quarter and exceeding expectations of a 2.5% increase.