Spain’s consumer-driven economy recorded another solid quarter of growth, though a major blackout this week may weigh on future performance.

Between January and March, GDP increased by 0.6% compared to the previous quarter, slightly below the 0.7% gain seen at the end of 2023 and the pace forecast by Bloomberg analysts.

Meanwhile, inflation remained unchanged in April at 2.2% year-on-year, above both expectations and the European Central Bank’s 2% target.

A core inflation measure, excluding energy and certain food items, surprised economists by accelerating to 2.5% from 2%.

Spain has emerged as the top performer among the eurozone’s largest economies, with the International Monetary Fund upgrading its 2025 outlook last week, an exception shared only with Russia among major global economies. The IMF now projects Spain’s GDP to grow by 2.5% in 2025, Bloomberg reports.

However, Monday’s widespread power outage could drag on growth forecasts. Bloomberg Economics estimated the disruption might shave off as much as 0.5% from quarterly GDP, though some of that loss could be recovered as energy systems stabilise.

By early Tuesday, power in Madrid had nearly fully recovered, and urban train services were gradually resuming.

Spain is benefiting from a robust services sector, which extends beyond the post-pandemic tourism recovery. However, the country’s central bank has raised concerns about whether Spain can continue outpacing growth in its key trading partners, France and Germany.

As the eurozone’s fourth-largest economy, Spain is the first to report first-quarter GDP, with data from other major eurozone countries set to follow on Wednesday. France is expected to show minimal growth of 0.1%, while Germany, Italy, and the broader eurozone are forecast to have expanded by 0.2%.

Inflation in the eurozone is slowing, with Friday’s data expected to show a 2.1% reading for the 20-nation bloc.

Furthermore, in a positive sign for the economy, unemployment remains near its lowest level in over 15 years, although first-quarter data released on Monday showed the highest quarterly increase since 2013. The unemployment rate stands at 11.4%, a decline from 12.3% a year ago.

Prime Minister Pedro Sanchez said last week that the “economic context is very complex, but when we talk about Spain it is very positive.” Spain “grows and creates jobs unlike anyone in the European Union,” he said.