Finance
Spain's economy far outgrows peers with 2.8% expansion in 2025
Published by Global Banking and Finance Review
Posted on January 30, 2026
2 min readLast updated: January 30, 2026
Quick Summary
Spain's economy grew by 2.8% in 2025, leading Europe. Strong domestic demand and workforce expansion were key drivers.
Spain's Economy Surges with 2.8% Growth in 2025, Leading Europe
Spain's Economic Performance in 2025
MADRID, Jan 30 (Reuters) - Spain's economy picked up pace in the final quarter of 2025, resulting in an estimated 2.8% growth last year, far outperforming its European peers, preliminary data from the National Statistics Institute (INE) showed on Friday.
Quarterly Growth Analysis
Gross domestic product expanded by 0.8% in the fourth quarter, accelerating from a 0.6% increase in the previous three-month period, according to INE's flash estimate. Analysts polled by Reuters had expected gross domestic product to grow 0.6% quarter-on-quarter.
Factors Driving Growth
Sustained domestic demand and higher household consumption thanks to workers' rising purchasing power - as well as a larger workforce due to an influx of migrants - have helped Spain outpace the euro zone's major economies in recent years.
Future Growth Projections
Current data or projections show an estimated annual growth of 0.9% for France, 0.4% for Italy and 0.2% for Germany.
"This is good news not only for 2025 but also because of what it means for 2026, because growth accelerated towards the end of the year," Economy Minister Carlos Cuerpo told state broadcaster TVE.
He added that preliminary GDP figures for January continued to be robust, which should help achieve the government's 2.2% growth target for this year.
Spain's full-year growth still represented a slowdown from 2024's 3.2% due in part to global trade tensions.
On an annual basis, Spain's fourth-quarter economic output expanded 2.6%, slightly below the average estimate of 2.7% in the Reuters poll. Third-quarter GDP growth was revised down to 2.7% from 2.8%.
(Reporting by David Latona and Gemma Guasch; Editing by Andrei Khalip)
Key Takeaways
- •Spain's economy grew by 2.8% in 2025, outperforming European peers.
- •Quarterly GDP growth accelerated to 0.8% in Q4 2025.
- •Domestic demand and increased workforce fueled growth.
- •Spain's growth surpasses France, Italy, and Germany.
- •Economy Minister optimistic about continued growth in 2026.
Frequently Asked Questions about Spain's economy far outgrows peers with 2.8% expansion in 2025
1What is economic growth?
Economic growth refers to an 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.
2What is household consumption?
Household consumption is the total value of all goods and services consumed by households, reflecting the spending habits and purchasing power of consumers in an economy.
