Experts Raise Alarms Over Spain's Economic Growth Sustainability in 2025
Experts warn that Spain’s 2025 economic growth, fueled by temporary EU funds and immigration, faces risks from inflation, low job quality, social pressures, and fiscal challenges.
- • Goldman Sachs and Santiago Carbó warn about Spain’s economic growth sustainability, citing reliance on temporary EU funds.
- • Inflation in Spain exceeds Eurozone levels, indicating potential economic overheating.
- • High immigration bolsters employment and consumption but raises sustainability questions.
- • Rising poverty and rental pressure add social strain; proposed public worker salary hikes risk fiscal imbalance.
Key details
Recent analyses by leading economists reveal growing concerns about the sustainability of Spain's economic growth in 2025 amid structural vulnerabilities and social pressures.
Goldman Sachs has expressed doubts about Spain's continued outperformance relative to the European average, as its economy heavily relies on temporary EU Next Generation funds that boost government spending capacity and GDP growth. Economist Santiago Carbó emphasized that Spain’s structural economic issues remain largely unaltered, warning of “clouds on the horizon” including rising global debt and volatile trade conditions that could destabilize growth. Notably, while immigration—estimated at around 500,000 people annually—is positively impacting employment and consumption, its sustainability is uncertain.
Carbó also pointed to Spain's inflation rate, which currently exceeds that of the Eurozone, suggesting potential overheating. Rafael Pampillón concurs, noting that although the labor force has expanded considerably, the newly created jobs tend to be low productivity, raising questions about employment quality. Despite the current strength of the Spanish stock market, with the Ibex index surpassing 16,000 points, concerns remain about fiscal prudence. Proposed public sector salary increases, detached from productivity gains, risk exacerbating unsustainable public spending.
Complementing these concerns, the economic panel on "La Brújula de la Economía" discussed the high levels of poverty in Spain and escalating rental pressures, which impose significant social and economic strain. The program also examined the lingering effects of tariffs from the Trump era on Spain’s trade and economic environment, highlighting the complex external challenges faced by the country.
Together, these expert analyses underscore a precarious outlook for Spain’s economy. While the immediate growth appears robust, the underlying structural fragilities, social challenges like poverty and housing costs, and the temporary nature of key funding sources cast doubt on long-term sustainability.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.