Spain’s Economy Forecast to Hit 2.9% Growth in 2025, Maintaining Strong Momentum
A recent report indicates that the Spanish economy will experience significant growth in 2025, continuing to outperform the Eurozone. This forecast, based on real-time tracking models and official data, reflects the positive contribution of domestic demand.
Intro: A joint report by EY Insights and EsadeEcPol indicates that Spain’s GDP is projected to grow by 2.9% in 2025, significantly higher than the Eurozone average. This growth is mainly driven by the services sector and private consumption. The momentum is expected to continue into early 2026, notwithstanding external risks.
Growth Forecast and Data Basis
The RealTimeTracker model estimates a 0.7% quarter-on-quarter GDP growth for Spain in Q4 2025, in line with the average of the preceding quarters. This brings the full-year growth rate to 2.9%, 0.7 percentage points higher than the forecast at the start of the year. The report is based on national accounts data up to the third quarter, along with the latest nowcasts from the AIReF and Funcas panels. This forecast has been confirmed by reports from multiple media outlets like Forbes España and Demócrata, emphasizing the resilience of the Spanish economy.
Key Driving Factors
The growth is primarily driven by the positive contribution of the services sector’s turnover index, particularly in commerce, transport, and various service activities. These factors have offset minor negative impacts from some demand, supply, and labor market indicators. Private consumption and employment continue to support domestic demand, with investment signals being mixed yet positive overall. In contrast, the Eurozone is projected to grow by only 1.2% to 1.3% in 2025, highlighting Spain’s remarkable outperformance.
2026 Outlook
If the first quarter of 2026 sees 0.8% growth, the full-year growth could reach at least 1.9%. Forecasts from international organizations include 2.0% from the IMF, 2.1% from the Funcas panel, 2.2% from the OECD, and 2.3% from the European Commission. This sustained growth is supported by the momentum in employment and investment, though it is crucial to monitor changes in the external environment.
Potential Risks
The report indicates that 2026 will face a risk environment similar to 2025, including geopolitical tensions, trade barriers, financial market volatility, and sovereign debt pressures. These factors could amplify the impact of external shocks and may be exacerbated by domestic budgetary and legislative stagnation. Despite these challenges, the relative resilience of the Spanish economy is viewed as a positive signal.
