Spain’s leftist government on Tuesday approved an increase of its 2025 growth forecast from 2.7 to 2.9 percent, more than double the average expected in the eurozone.
The European Union’s fourth-largest economy has outperformed its peers since 2021, driven by tourism, low energy prices, domestic consumption and foreign investment.
Economy Minister Carlos Cuerpo said the cabinet had approved a revised economic outlook on Tuesday, which he said reflected the latest data and aligned with projections from other institutions.
“Despite the complex, uncertain international context and a slowdown among our main partners within the European Union, Spain maintains a dynamic and resilient growth,” Cuerpo told a press conference.
The International Monetary Fund recently raised its full-year growth forecast for Spain for 2025 to 2.9 percent from 2.5 percent previously.
Spain’s revised forecast is sharply higher than the 1.3-percent growth Brussels expects for the entire eurozone in 2025, as large economies such as France and Germany post sluggish figures.
The Spanish economy grew by 0.6 percent in the third quarter, slowing slightly from 0.8 percent in the previous quarter as exports fell.
While Spain’s economic performance has drawn praise, the country’s unemployment rate of 10.45 percent in the third quarter is the highest in the European Union.
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Another headache for the minority coalition is its inability to approve a new budget since its formation in 2023, limiting room for manoeuvre in launching new spending programmes.
That year’s accounts have been extended automatically as the government has failed repeatedly to squeeze a new budget through a hung parliament, although the impasse has not weighed down economic growth.
Budget Minister Maria Jesus Montero presented a 2026 spending ceiling of €212 billion ($246 billion) on Tuesday, an increase of 8.5 percent on the current framework and a first step towards submitting a new budget to lawmakers.
Montero vowed to “give it all” in negotiations with other parties, aiming to present the budget in the first quarter of next year for approval in parliament in April or May.
