IMF Raises Spain's Growth Forecast to 2.9% in 2025, Confirming It as Fastest Growing Advanced Economy

The International Monetary Fund (IMF) has revised upwards its economic growth projections for Spain, forecasting a 2.9% increase in GDP for 2025, representing an improvement of four-tenths of a percentage point over prior estimates. This update positions Spain as the fastest-growing advanced economy for the second consecutive year, outperforming the United States at 2% growth and the broader Eurozone, which is projected to expand by just 1.2% in 2025. The IMF also projects a 2% growth rate for Spain in 2026, which, while lower than 2025, maintains Spain's robust pace compared to other advanced economies (100308, 100315, 100309).

This growth forecast surpasses the Spanish government's own estimate of 2.7% for 2025 and exceeds the Bank of Spain’s 2.6% forecast. The IMF's unemployment outlook suggests a decrease to 10.8% in 2025 and 10.7% in 2026, although these rates remain significantly above the Eurozone average of 6% expected in 2025. Inflation in Spain is projected at 2.4% for 2025, slightly above the average for advanced European economies (2.2%) and the Eurozone (2.1%), before easing to 2% in 2026 (100308, 100315).

Globally, the IMF forecasts a slight slowdown in world GDP growth to 3.2% in 2025 from 3.3% in 2024, influenced by factors such as trade tensions, protectionist measures, and political uncertainty — notably, uncertainties surrounding tariffs and migration policies. Growth in large Eurozone economies like Germany (0.2%), France (0.7%), and Italy (0.5%) is expected to be modest in comparison to Spain. The IMF underscores concerns about the effects of restrictive immigration, trade disruptions, and waning pandemic recovery funds, which could dampen long-term growth prospects (100308, 100309).

The IMF's report highlights the resilience of Spain's economy amid global challenges, attributing its strong outlook in part to internal trade flows within Europe that have shielded exports despite softer demand from the U.S. and other major markets. However, the IMF cautions that risks persist from geopolitical instability and shifting trade policies, which could impact investment, consumption, and price levels going forward.

In summary, Spain is set to lead advanced economies in growth for 2025, consolidating its economic recovery, though it will face challenges including above-average inflation and elevated unemployment relative to its Eurozone peers in the near term. The forecast signals optimism tempered by caution amid a complex global economic environment.