Spain has emerged as one of the fastest-growing developed economies, posting 3.2% GDP growth in 2024, far exceeding the eurozone’s projected 0.8% expansion. The latest data from the National Statistics Institute confirms Spain’s economic strength, driven by solid exports, tourism, and rising consumer spending. In the final quarter of 2024, GDP expanded by 0.8%, matching the previous quarter’s pace.
Economy Minister Carlos Cuerpo hailed the figures as a "reason for national pride," particularly in a period of global economic uncertainty. "Spain continues to lead eurozone growth, with GDP growth four times higher than the regional average," he stated.
Key Growth Drivers
- Booming Tourism Industry: Spain welcomed a record-breaking 94 million tourists in 2024, reinforcing its position as the world’s second-most visited country. Tourism now accounts for approximately 13% of GDP.
- Strong Export Performance: Spanish exports grew by 3% year-over-year, helping offset economic slowdowns in other eurozone nations.
- Rising Consumer Spending: Household consumption increased by 3.7%, supported by declining unemployment and steady wage growth.
- Services Sector Resilience: The service sector expanded by 3.9% year-over-year, underpinning broader economic stability.
Economic Outlook for 2025
Analysts expect strong economic performance to continue in 2025, with the Bank of Spain projecting 2.5% growth—higher than forecasts for Germany, France, and Italy. The International Monetary Fund (IMF) also predicts that Spain will outpace other major advanced economies.
- Unemployment Decline: The jobless rate fell to 10.61% by the end of 2024, its lowest level since the 2008 financial crisis.
- Fiscal Strength: Spain is in a better fiscal position than many eurozone peers, making it less vulnerable to potential U.S. trade tariffs under President Donald Trump.
- Inflation & Consumer Confidence: High real income growth and easing monetary policy could boost consumption by 4% in 2025, according to Capital Economics analyst Adrian Prettejohn.
Challenges & Risks
Despite the optimism, Spain faces several economic hurdles:
- Rising Cost of Living: A housing crisis in major cities is eroding purchasing power, despite strong overall growth.
- Below-Average GDP Per Capita: Spain’s per capita GDP growth remains slower than other Western European nations, having increased just 4% since 2007.
- Political Uncertainty: The minority left-wing government struggles to pass major legislation, including the 2025 budget, raising concerns about long-term economic stability.
- Global Trade Tensions: Tariff threats and geopolitical uncertainty could impact export-driven growth.
Despite these risks, Spain remains a standout performer in the eurozone, with its diversified economy and strong domestic demand positioning it for continued expansion in 2025.
