Published by Global Banking & Finance Review®
Posted on November 17, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleSpain's 2025 economic growth forecast is raised to 2.9%, surpassing EU averages. Social challenges like poverty and housing crisis persist.
MADRID (Reuters) -The Spanish economy is expected to grow 2.9% this year, at more than double the average pace in the European Union and exceeding the previous forecasts of 2.6-2.7%, the European Commission and the Spanish government said on Monday.
The EU's executive arm said gross domestic product in the 20 countries that share the euro currency would grow 1.3% this year, rather than 0.9% as forecast last April, while the whole bloc's GDP would expand 1.4%. It raised its estimate for Spain from 2.6%, citing strong domestic demand.
"The government will raise its forecast to 2.9%, in line with the European Commission," Economy Minister Carlos Cuerpo told a parliamentary hearing.
The government had in September upgraded the growth forecast to 2.7% from 2.6%, predicting a positive outlook until 2028.
The EU estimates Spain's economy will grow 2.3% in 2026, but Cuerpo said the government would stick to a 2.2% forecast.
He also said the government would present a new indicator within its economic targets that would link macro- and microeconomic data to measure how Spain reduces inequality and poverty levels, making sure that "growth figures translate into the daily lives of households".
According to Eurostat, 25.8% of Spaniards were at risk of poverty or social exclusion in 2024, among the highest rates in the EU.
Poverty and extreme social exclusion in Spain have worsened since the 2008 global financial crisis and doubled among children, according to a study issued last week by the Foessa Foundation, which is linked to Caritas, the Catholic Church's charity.
The study showed that neither the post-crisis boom until 2018 nor the period following the pandemic managed to improve the situation, with the level of extreme social exclusion rising to 8.8% of Spain's population from 6.3% in 2007.
The housing crisis is the main cause of social exclusion in Spain and has worsened since 2021, affecting one in four people in the country, the study said.
(Reporting by Corina Pons, Jesus Aguado and Victoria Waldersee, editing by Charlie Devereux, Aidan Lewis)
Economic growth refers to the increase in the production of goods and services in an economy over a period of time, typically measured as the percentage increase in real GDP.
Social sustainability focuses on the social structures and relationships that support the well-being of individuals and communities, ensuring that social equity and quality of life are maintained.
A financial crisis is a situation in which the value of financial institutions or assets drops significantly, often leading to widespread economic disruption and loss of confidence in the financial system.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
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