Spain's Economy Surges with 2.8% GDP Growth in 2025, Driven by Strong Consumption and Investment

Spain's economy has defied expectations with a remarkable acceleration in the fourth quarter of 2025, driving the country's annual GDP growth to 2.8%, double the Eurozone average. According to data from the Instituto Nacional de Estadística (INE), Spain's GDP expanded by 0.8% in the last quarter, surpassing analysts' forecasts of 0.6%. This robust growth is largely fueled by a surge in household consumption, which rose by 3.4%, underpinned by record job creation and increased purchasing power as wages outpaced inflation.

The labor market also showed marked improvement; the unemployment rate fell below 10% for the first time since 2008, signaling stronger employment dynamics that supported consumption. Investment in Spain continued to grow strongly as well, with a 6.3% increase, including a 5.2% rise in construction and a 9% jump in equipment investment. Additionally, productivity per hour worked rose 0.7%, indicating gains in efficiency alongside job growth.

These factors combine to present a unique growth cycle for Spain, supported by government policies and the Recovery Plan, positioning the country as a leader among developed economies. The outlook remains positive, with projections suggesting GDP growth of 1.1% for 2026. This unexpected acceleration highlights Spain's dynamic economic performance at a time when many other economies face headwinds.