Spain overtakes Mexico, Australia and South Korea to reclaim its place in the world’s top 12 economies, helped by rising population numbers, steady job growth, and a booming tourism sector.
El Economista writes that Spain has moved back into the world’s top 12 economies by size, based on gross domestic product (GDP) according to figures released by the International Monetary Fund (IMF). The country held the fifteenth position in recent years, but economic momentum has helped turn that around.
The IMF expects Spain’s GDP to hit $1.8 trillion in 2025, up from $1.62 trillion in 2023. That growth reflects more than just strong domestic activity. EU support, more people entering the workforce, and a modest boost in productivity have all played a role. As a result, Spain is again seen as one of the main engines of growth in the eurozone.
A growing population and thriving tourism
Spain’s population has grown by nearly a million between 2022 and 2024. By 2030, that number could rise by another three million, according to IMF projections. Much of this growth is due to immigration, which has expanded the labour market and supported GDP growth. Provided employment and productivity remain positive, Spain could continue to outperform other mid-sized global economies.
Tourism has also helped drive this shift. In 2024, tourism-related services saw their strongest growth since the post-pandemic recovery. Other service exports also performed well, while a slower pace in import growth improved Spain’s trade balance.
Income, savings, and state spending
Household income grew by 8.7% in 2024. This was backed by rising wages, up 5%, and solid job creation. People also benefited from investment returns and social support. Even though household spending increased, savings remained strong, with households saving around 13.6% of their disposable income.
Government spending has also been a factor. Since 2019, public consumption has grown 18.2%, compared to just 6.8% GDP growth over the same period. In 2024, the budget deficit was 2.8% of GDP, excluding costs linked to storm-related damage in Valencia.
Is the growth sustainable?
Despite the positive outlook, some Spanish economists urge caution. They point out that much of the current growth is based on extensive factors—such as population expansion and tourism—rather than improvements in productivity or innovation. These types of growth may not be sustainable in the long term.
Concerns have also been raised about the country’s structural weaknesses. Spain still faces high youth unemployment and a large share of temporary contracts in its labour market. Economists like Raymond Torres of Funcas have warned that unless Spain addresses these underlying issues—along with reforms in education and industrial policy—the country could struggle to maintain its current momentum.
Furthermore, although immigration is currently driving growth, it also brings challenges. Without sufficient investment in housing, infrastructure and public services, rapid population increases could strain resources and fuel social tension
Favourable outlook?
While GDP size shows economic scale, it doesn’t reflect quality of life. Measures like GDP per capita or the Human Development Index (HDI) offer more insight into how people live.
Even so, the outlook is favourable. Spain’s economy is forecast to grow by 2.5% in 2025, following a stronger-than-expected 3.2% growth in 2024. By 2030, GDP per capita may rise to $42,000, from its current $36,000.
Spain was the world’s eighth-largest economy in 2007 but then lost ground due to weak productivity and demographic pressures. Now, with its population rising and jobs being created at pace, Spain is once again becoming a leading force in Europe’s economy.
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