Spain’s economy is growing three times faster than that of the eurozone

by Lorraine Williamson
eurozone economy

Spain has also had the highest economy growth of the major eurozone this year. This is the OECD’s assessment. The forecast for Spain’s gross domestic product (GDP) is upward for 2024. That is a growth of 1.5%.

The economy in Spain is once again showing the highest growth among the major economies of the eurozone this year. This is the OECD’s assessment. Spain’s gross domestic product (GDP) forecast for 2024 has been revised upwards. 

For 2025, the expected growth for Spain remains 2%. On the other hand, eurozone growth has been revised downwards to 0.6%. This represents a decrease of 0.3% compared to two months ago. If these estimates are met, Spain would grow almost three times as fast as the eurozone average. 

Spain stands out within the eurozone 

Spain‘s heightened forecasts stand in stark contrast to those of the eurozone’s major economies. On the other hand, growth expectations there have decreased. For Germany, for example, the OECD estimates 0.3% this year and 1.1% next year, while it previously expected growth of 0.6% in 2024 and 1.2% in 2025.   France has also lowered its growth forecast to 0.6% in 2024, 0.2% less, while it remains at 1.2% for 2025. 

With this new growth in Spanish GDP predicted by the OECD, the Spanish economy would follow in the wake of last year, when it grew by 2.5%. The average for eurozone countries is 0.5% 

Growth expected by IMF 

This estimate is in line with that of the International Monetary Fund. This predicts in its latest report that the Spanish economy will grow by 1.5% this year. According to the IMF, this growth is higher than that of the other large countries. To begin with, growth is three times as high as in Germany (0.5%) and twice as much as Italy (0.7%). Finally, growth is 0.5% more than in France (1%). 

Lower inflation 

In October 2023, inflation in Spain was even higher than the European average. But during the recent price crisis, Spain experienced a smaller increase in inflation. As a result, real incomes were less affected than in other European economies. 

The OECD has lowered the expected price increase in Spain in 2024 by 0.4% to 3.3%. On the other hand, it has raised its forecast for 2025 slightly, from 2.3% to 2.5%. Core inflation is expected to fall to 2.7% in 2024 from 4.1% in 2023, 0.4% less than previously expected. For 2025, the expected price increase is 2.1%, 0.1% below the previous forecast. 

For the eurozone, headline inflation is expected to be 2.6% this year, compared to the previously expected 2.9%. To decrease to 2.2% in 2025, a tenth less than the previous forecast. Meanwhile, the core rate in the eurozone is expected to fall to 2.6% in 2024, half a percentage point less, and to 2.2% in 2025, a tenth less than the previous forecast. 

Global growth of 2.9% 

The OECD’s new forecasts assume higher growth in the global economy, with growth of 2.9% in 2024, 0.2% above the previous forecast. For next year, the forecast of 3% remains unchanged. The adjustment is mainly due to the improved growth forecast for the United States. There, the OECD forecasts growth of 1.7% in 2025, while for the eurozone it lowers the expected growth by 0.2% to 1.3%. 

Also read: Spaniards very optimistic about their economy

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