Spain –2025-2026 Scenario: dynamic growth in an uncertain environment
- 22.04.2025
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- Key points of the scenario
- Recent economic news
- Household
- Business customers
- International trade
- Public finances
- Risks
- The scenario in figures
In resume
The Spanish economy began 2025 with greater momentum than its European partners. In 2024, GDP grew by 3.2%, increasing by 0.8% in Q4, supported by consumption and investment. The fundamentals are solid: a current account surplus for the 13th year, private debt limited to 125.1% of GDP (vs. 153.5% in the eurozone) and public debt down to 101.8%. The net international investment position also improved. This strong performance served to increase the growth forecast to 2.5% in 2025. The recovery remains concentrated on domestic demand. Lower interest rates, disinflation (inflation is expected to be 2.5% in 2025) and a high savings rate should boost consumption. Employment is set to increase by 2% and unemployment is forecast to fall to 10.9%.
Despite this favourable environment, foreign trade is expected to have a negative impact, due to dynamic imports and slowing exports. Geopolitical and trade tensions (US-EU) represent a significant risk. The full deployment of NGEU funds will be important in maintaining the momentum of private investment.
We estimate that our 2025 forecast for the deficit of 2.9% is fairly balanced, given that funds linked to the Covid-19 pandemic will still being spent this year and that defence spending is likely to increase. We estimate, therefore, that the dynamism in activity and household income will cause tax revenues to rise. Spending is expected to grow at a moderate rate, less than revenues, thanks to the lower level of inflation and the exhaustion of measures introduced to cope with rising energy prices (with the exception of transport-related cuts in the first half of 2025). We therefore expect that the sustained growth in the Spanish economy will allow the public deficit to remain below the 3% threshold in 2025.
Ticiano BRUNELLO, Economiste