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Sunbathers crowd a Barcelona beach on a recent day in August. A record number of tourists visiting Spain this year has helped to boost the countrys economic growth. Photo: European Pressphoto Agenc

MADRIDSpains robust economic expansion is defying concerns that a political impasse, now in its ninth month with no end in sight, would tarnish one of Europes economic bright spots.

But the pillars that have sustained Spains recovery from recession are showing signs of strain, and economists expect growth to slow in 2017in part because political uncertainty is putting a damper on some kinds of investment.

The Spanish economy grew 0.8% in the second quarter driven by consumer spending and exports, the countrys statistics agency said Thursday. The uptick is in line with first-quarter growth and better than the 0.7% the agency had predicted in July.

The eurozones fourth-largest economy is on track to expand around 3% this year, outpacing the International Monetary Funds projections for France, Germany and the U.S.

Spain has been without a full-fledged government since December. Doubts about who will form the next one have persisted since the divided parliament elected that month failed to install a prime minister and was dissolved. A new parliament, elected in June, is also deadlocked among four major parties, none close to a majority.

Mariano Rajoy, the conservative leader who was elected during the recession in 2011 and has overseen three years of recovery, remains in office as acting prime minister but with no power to propose legislation or spend on new projects. Parliament next week is expected to reject his bid for a second term, as head of a minority government, creating the possibility of yet another general election.

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Despite the uncertainty, Spaniards are spending more this year than last, buoyed by growth in jobs and wages. A global drop in oil prices has left the countrys consumers with some extra cash. Negative interest rates have pushed down the monthly cost of many borrowers mortgages in Spain, where the majority of home loans are variable-rate, meaning they fluctuate with changes in benchmark rates.

Yields on government bonds have fallen to less than 1% as investors remain optimistic about Spains economy and the European Central Bank buys sovereign debt to try to boost growth and lift inflation in the region.

Parliament passed a 2016 budget that locked in government spending before last Decembers inconclusive election.

Spain is on autopilot from the fiscal standpoint, said Daniele Antonucci, a Morgan Stanley economist.

But in 2017 Spain must trim spending to meet budget-deficit targets set by the European Union. Once a government is in elected, Spain will tighten the belt, Mr. Antonucci said. The question mark is to what degree, and that also depends on the political situation.

Budget cuts would slow the economy in 2017, said Ignacio de la Torre, chief economist at Arcano Group, a Madrid-based investment bank. So would other trends he expects in the coming year: higher oil prices, slower job growth at home, and a decline in exports to Britain, whose currency has weakened since its decision to leave the European Union.

Weve had a series of tailwinds this year, which were not going to have next year, Mr. De La Torre said.

The political stalemate has begun to take a toll on the economy: It chugs along, economists say, but could be growing even faster with a government in place.

Miguel Cardoso, chief Spain economist at lender Banco Bilbao Vizcaya Argentaria SA, said the economy probably would be expanding by 3.5% in 2016 were it not for political uncertainty. Some individuals and businesses are paring back purchases and delaying or canceling planned investments, he said.

BBVA expects Spains economy to grow 3.1% this year. The accumulation of stalled or scrapped investment plans will hit growth even harder next year, Mr. Cardoso said. The bank projects 2.3% growth in 2017.

Antonio Del Olmo, president of a company that designs and installs kitchens, said political uncertainty is hurting his business, The Singular Kitchen. Spaniards, he said, are wary of spending around 20,000 ($22,500) to upgrade their kitchens when they dont know whether a new government will hit them with higher taxes.

A lot of people are waiting to renovate their house until they see measures and rules of the game that will give them certainty, said Mr. Del Olmo, who is based in Valladolid.

There are broader signs of a pullback in investment.

With its authority to start new projects suspended, Spains Public Works Ministry and the state companies it oversees spent 19.8% less on contracts in the first six months of this year than they did in 2015.

Spanish manufacturers in July reported the first monthly reduction in new orders from clients in nearly three years, according to a survey of purchasing managers at manufacturing companies compiled by data firm IHS Markit.

If new orders are falling, that makes it very difficult to increase output or increase staff, said IHS Markit economist Andrew Harker. He said new-order growth had been slowing since February, in part because companies are reluctant to make investments in a climate of uncertainty.

Spains service industry is proving more resilient, buoyed by a boom in tourism as visitors choose Spain over Mediterranean destinations hit by recent terror attacks. Hiring and business activity at companies such as hotels and restaurants was robust in July, the IHS Markit survey showed.

A record 6 million foreign tourists stayed in Spains hotels in July, the countrys statistics agency said. The figure for the first seven months of the year is 28.3 million, an 11% increase from 2015.

Hotels in Tenerife, in Spains Canary Islands, are completely full, said Maky González, director of travel agency Altántico Excursiones. Occupancy cant get any higher.

Emese Bartha in Frankfurt contributed to this article.

Write to Jeannette Neumann at jeannette.neumann@wsj.com