Spain – Scenario 2024-2025: economic résilience

The Spanish economy is going through the final phase of the inflationary cycle that began in 2021 when global supply chains were disrupted owing to the end of the pandemic and gas prices came under pressure due to the war in Ukraine. After growth of 2.5% in 2023, we expect the Spanish economy to grow more moderately in 2024 owing to rising interest rates and the slowdown in the tourism sector, which is already operating at higher levels than in 2019.

But economic activity will be bolstered throughout 2024 by the lessening impact of past interest rate hikes (starting in the second half) together with the decrease in inflation and acceleration in NGEU spending. Overall, we expect GDP growth to come out at 1.9% this year and increase modestly to 2% in 2025.

Core inflation dynamics will be moderate, in line with the latter part of 2023. We expect headline inflation to fall from 3.5% in 2023 to 3.3% in 2024, but core inflation will fall more sharply, from 4.4% in 2023 to 2.5% in 2024.