Concerns Deepen Over Spain's Economic Strength Despite Growth Figures in 2025

Spain’s economy, while projecting a notable GDP growth of 3.2% in 2024—well above the eurozone average of 0.7%—faces deep structural challenges that question the sustainability of this buoyancy. Recent analyses underscore that this economic expansion heavily relies on temporary factors, particularly immigration, which has bolstered sectors suffering labor shortages through an influx of low-skilled workers. However, this has not translated into improved productivity or living standards for most citizens.

According to the Financial Times, despite signs of a gradual shift toward knowledge-intensive services, Spain continues to lag behind other European countries in productivity, partly because of low business investment. The education system, performing below the EU average, compounds these problems by failing to address the labor market’s demands, contributing to Spain maintaining the highest unemployment rate in the EU.

Meanwhile, domestic observers like Mikel Buesa, a professor at Complutense University, sharply critique the official optimism. Buesa highlights the contrast between macroeconomic data and the harsh realities faced by families and businesses, especially young people struggling with unemployment, housing affordability, and poverty. He accuses the government of manipulating pension studies and controlling information to sustain a politically favorable narrative. Spain’s public debt surges beyond €1.7 trillion, while R&D investment stagnates at 1.5% of GDP—far below European standards—undermining prospects for productive regeneration.

Institutional weaknesses are also a point of concern. Critics argue that Spain’s slow and ineffective use of the significant €70 billion NextGenerationEU funds limits the transformative impact necessary for recovery. The ongoing housing crisis, exacerbated by ideological divides, further strains social cohesion.

In summary, while headline growth figures suggest a robust economy, the underlying structural challenges—low productivity, education deficits, high unemployment, and social strains—reveal an economy struggling beneath the surface, casting doubt on the long-term sustainability of its recent performance.