Spain Grows More Than Europe, But Is It Sustainable?

Spain is increasing quickly than its Eurozone neighbours. That has raised questions and concerns regarding whether its capacity signals a structural economical translator aliases is it conscionable a impermanent arena driven by circumstantial factors. 

If nan Spain of coming is compared to nan 1 during nan tallness of nan world COVID crisis, nan state has 2.2 cardinal much group successful employment, while its GDP has grown 9 per cent successful existent terms. Its maturation is doubly that of nan Eurozone. 

In Q2 2025, Spain’s GDP grew by 0.8 per cent quarter-on-quarter, according to preliminary information from nan National Institute of Statistics (INE). The state surpassed nan Eurozone’s mean maturation of 0.3 per cent.

Outgrew nan Eurozone by 2%

On a year-on-year basis, Spain’s system grew 2.9 per cent, compared to 0.9 per cent for nan Eurozone arsenic a whole. These figures brought optimism, but besides sparked statement astir nan sustainability of this maturation and whether it reflects a genuine alteration successful nan country’s economic model.

The statement is that nan sectors that person made nan astir advancement successful caller years are high-value-added services.

The accusation and communications assemblage (which includes ICT activities) stands retired supra each others, pinch its added worth expanding by 24 per cent, according to Eurostat data. Professional, scientific, and method activities, each of which connection precocious added worth and value jobs, followed intimately behind, pinch maturation of 21 per cent.

The authorities uses this information to warrant its occurrence successful changing Spain’s accumulation exemplary to lead Europe’s growth. 

However, nan reality is that these high-value-added services are increasing quickly successful each countries. Spain is nary exception. Simply put, these are nan activities that are now driving nan economies of developed countries. Companies astir nan world are investing successful them, nan El Confidencial said successful an in-depth system report on Spain.

Tourism and home demand, cardinal drivers

Several factors person underpinned nan spot of nan Spanish system successful caller quarters. Tourism, 1 of nan accepted pillars of nan Spanish economy, continues to execute exceptionally.

In 2024, 93 cardinal foreigners visited Spain, and nan state is expecting 100 million.

Household consumption, supported by rising wages and a resilient labour market, has remained robust contempt inflationary pressures.

The unemployment rate, while still precocious astatine 11.3 per cent, is astatine its lowest successful complete a decade.

Trends propose astatine slightest immoderate changes

Spain’s maturation has prompted statement regarding its guidance and whether it’s much diversified and resilient. Spain has faced disapproval for its deficiency of business weight and invention compared to bluish European economies. 

However, caller trends propose immoderate changes. The integer and renewable power sectors are gaining ground, pinch Spain taking nan lead successful star and upwind power crossed nan European continent.

“Spain is nary longer conscionable sun and beach; we are building an system based connected innovation, digitalisation, and sustainability,” said Economy Minister Carlos Cuerpo successful a caller statement. 

The maturation of exports by 4.1 per cent year-on-year successful nan first half of 2025 points to greater world competitiveness, peculiarly successful sectors for illustration agri-food, automotive, and pharmaceuticals.

Home income person risen sharply this year, particularly successful nan second-hand sector, wherever existent property agencies play a important role. More transactions and higher prices person caused nan sector’s gross to emergence importantly and, therefore, summation its GDP contribution.

The situation is to turn better

The different superior high-value-added services sector, professional, scientific, and method activities, did lend to maturation supra nan eurozone average, but remains successful 11th spot among nan 20 Eurozone countries.

Despite nan encouraging financial figures, economists pass that Spain’s maturation whitethorn not needfully bespeak it has made structural changes. The reliance connected tourism, while a strength, exposes nan system to outer shocks, specified arsenic geopolitical tensions aliases changes successful world recreation patterns.

For now, however, Spain enjoys economic strength, but progressing from this constituent connected will dangle connected its expertise to equilibrium accepted strengths pinch caller opportunities. As 1 economist put it, “Spain is growing, but nan situation is to turn better.”