Lorraine Williamson
Despite global economic uncertainty, Spain is emerging as a notable exception. While many major economies, including the United States, the United Kingdom, and Japan, are seeing their economic growth forecast for 2025 revised downward, Spain’s economy remains on a steady path.
The International Monetary Fund (IMF) has raised Spain’s growth forecast for 2025 by 0.2%, now expecting an increase of 2.5%. This is a significant revision, as Spain continues to outpace many of its European counterparts.
Strong exports and labour market drive growth
According to the IMF, Spain’s economic resilience is driven by a combination of factors, with strong service exports playing a key role. The nation has also benefitted from a stable and relatively robust labour market, bolstered by immigration. This has helped support demand and employment levels. These elements, along with a growing export sector, provide a solid foundation for the Spanish economy moving forward.
The forecast for 2025 has been revised upwards. However, the IMF has also held steady with its 2026 projection of 1.8% growth. This suggests that Spain will continue to be an economic bright spot in Europe for the next few years, despite broader global uncertainties.
Spain outpaces other eurozone nations
Within the eurozone, Spain’s growth rate is among the highest. Only Malta, Croatia, and Lithuania are expected to grow at a faster pace. Other countries, such as Cyprus, are also forecasted to see similar growth rates of 2.5% in 2025. In comparison, several other European countries, including those outside the EU like Serbia, Belarus, Russia, and Turkey, are also showing positive economic performance.
Domestic political challenges
However, Spain’s economic future is not without risks. The IMF has highlighted domestic political uncertainty as a potential vulnerability. The country has struggled to pass a new national budget for the past two years, operating instead with 2023 budget figures, which no longer reflect the current economic situation. This ongoing political stalemate could affect Spain’s ability to respond to future challenges effectively.
Global outlook: Smaller economies shine
While major economies grapple with slowdowns, smaller nations, particularly in Africa and Latin America, are seeing more optimistic economic forecasts. The IMF has increased growth projections for countries like Argentina, Peru, and Ecuador, where internal factors such as political stability and economic reforms have begun to yield positive results.
In conclusion, while the global economy faces significant challenges, Spain’s economy stands out as a rare success story, showing resilience and growth potential amid uncertain times.
Spain´s economy outpaces Eurozone in 2024