Spain cuts 2025 GDP growth forecast to 2.6%
Spain’s economy is still set to expand solidly this year, but the country’s statistics agency has trimmed its 2025 growth forecast to 2.6% from 2.8% as household consumption and exports come in weaker than expected.
The revision from the INE matters because it points to a less balanced expansion, with domestic demand doing slightly less of the heavy lifting and external demand adding less support than previously estimated. For investors, that makes the growth outlook more dependent on consumers and investment holding up against softer trade momentum and any cooling in activity into year-end.
The INE also lifted its estimate for 2024 GDP growth by two tenths to 3.7%, while fixing 2023 growth at 2.4%, one tenth lower than before. For 2025, demand from within Spain is now seen contributing 3.4 percentage points to growth, down from 3.5 points, while external demand subtracts 0.8 points, compared with 0.7 points previously.
Household consumption was revised down three tenths to 3.1%, a sign that private spending is not as strong as initially thought. Public consumption was unchanged at 2.4%, and investment was marked up to 6.0% from 5.8%, offering some offset to the weaker consumer and trade picture.
Exports were downgraded sharply, growing 2.6% rather than the 3.6% estimated in March, while imports rose 5.5% versus a prior 6.2% estimate. The gap suggests Spain is relying more on internal demand than on the broader global cycle, a risk if trade slows further or if higher borrowing costs keep weighing on consumption.
The revisions leave 2025 nominal GDP at 1.694 trillion euros, 0.5% above the initial estimate, and show jobs still growing at a 2.8% pace in full-time equivalent terms. Hours worked rose 2.0%, down slightly from the prior estimate, while employee compensation held at 7.2%.
Productivity growth for the economy was revised down to 0.6% from 0.7%, underscoring that Spain’s expansion remains healthy but not especially efficient. That combination may keep pressure on policymakers to preserve demand without letting wage and cost dynamics overheat.
For markets, the message is that Spain remains one of the euro zone’s better growers, but the upward momentum is less broad-based than hoped. Banks, domestic retailers and cyclical exporters will likely watch whether investment can continue to offset weaker consumption and trade in the months ahead.
| Entity | Gains | Losses |
|---|---|---|
| Spanish economy | ▲Still grows 2.6% in 2025 | ▼Loses momentum from weaker demand |
| Households | ▲Consumption still rises 3.1% | ▼Face softer spending outlook |
| Exporters | ▲Nominal GDP remains supported | ▼Weaker export growth, slower trade |
| Investors in Spanish cyclicals | ▲Investment revised up to 6.0% | ▼Less help from consumers and external demand |