Spain’s economy grew 2.8% in 2025 to €1.68 trillion – more than France and Italy

The country, despite the general stagnation in the EU, has surpassed its closest rivals and emerged as a standout performer.

Spain’s economy grew by 2.8% in 2025 to reach €1.68 trillion, according to confirmed data released by the National Statistics Institute (INE) on Wednesday, driven by strong household consumption and business investment.

Spain is now ahead of France and Italy as well as other major European economies. It has also cemented its place as one of fastest-growing economies in the area.

France recorded growth of only 0.7% by 2025. Italy was even further behind with 0.4%.

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Greece and Portugal also saw solid growth, but both were below Spain’s pace.

In 2025, the GDP of the European Union rose by 1,5%, showing that Spain’s growth rate is nearly twice the EU average.

Ireland achieved the highest growth of the EU with 12.3% in 2025.

The INE confirmed that the economy grew 0.8% in the last quarter of 2018, creating a carryover that indicates a baseline growth of 1.1% even without new stimulus.

Although the performance is strong, 2025 represents a slight drop from the growth of 3.5% in 2024.

Spain’s economic situation has been a roller coaster ride over the past decade. It alternated between stability and crisis, then rapid recovery.

The growth rate between 2016 and 2019 remained constant, ranging anywhere from 2.9% – 2.0%. It consistently exceeded the Eurozone’s average.

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In 2020, the COVID-19 epidemic, one of Europe’s worst declines, caused the economy to fall by 10.9%.

Spain’s heavy reliance on services and tourism, both of whom were negatively affected by lockdowns.

As demand surged, and travel resumed, the GDP expanded by 6.7% in 2020 and 6.4% in 2030.

The growth rate stabilized in the years following, with a 3.5% increase in 2024, boosted by tourism and exports records.

The 2,8% growth rate recorded in 2025 represents a shift toward a sustainable pace. However, it still exceeds key European peers.

The key driver was the increase in household consumption, which grew by 3.3% during the past year. This growth was supported by immigration and job creation.

The investment sector also played an important role. Gross fixed capital formation increased by 5.8%. Construction rose by 5.2%, and capital goods jumped 7.4%.

External demand reduced the performance by 0.7 percentage points.

Exports of services other than tourism grew by 11.1%. This was mainly due to an increase in passenger numbers, especially consultancy, IT, transport and transport-related services.

Read More: Spain is responsible for 20% of GDP growth across the Eurozone while other traditional powerhouses struggle.

Spain’s economy is growing twice as fast as the Eurozone, according to the Ministry of Economy.

The report also noted a 0.7% rise in productivity per working hour, and described the period as “unprecedented” growth cycle combining job creation and efficiency gains.

Forecasts suggest that the economy will grow at a moderate rate in 2026.

The International Monetary Fund predicts growth of 2.1%, while Standard & Poor’s estimates 1.9%, Funcas projects 2.2% and BBVA Research expects 2.4%.

Soon, the Bank of Spain should publish updated macroeconomic forecasts.

Economists claim that Spain has reestablished itself as an important growth engine in the Eurozone despite global uncertainty and weaker demand from abroad.

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