According to a report released by the International Monetary Fund (IMF) on 10 April, Spain is expected to outperform other European countries starting from 2025. This follows a strong 2024, when the country’s economic activity expanded by 3.2%.

Despite a rise in public spending, Spain’s public finances continued to improve well into last year, while inflation eased from 3.4% in 2023 to 2.9% in 2024.

According to the IMF, Spain’s economy is still going strong, driven by a rise in service exports, more people entering the workforce, and increased local spending. The report says that people are spending more because prices are rising more slowly, wages are improving, and jobs are easier to find. Immigration is also helping more people find work.

The unemployment rate is stated to remain at 11%, allowing for stable economic growth. However, GDP (Gross Domestic Product) is projected to reduce from 2.5% in 2025 to 1.8% in 2026.

Carlos Cuerpo, Spain’s minister of economy, trade and business, is quite optimistic about the economic performance of Spain. He states: “The Spanish model is successful because it is a balanced model, and this is what guarantees the sustainability of growth.” He adds that it was the financial services, tourism and technology industries that helped the Spanish economy return to its pre-pandemic state.

In contrast to Spain’s strong economic performance, Germany’s economy contracted by 0.2% in 2024, while France and Italy posted more modest growth of 1.1% and 0.5%, respectively. This makes Spain the clear leader among the largest European economies, which is a shift that has grabbed global attention.

While tourism is a major industry that supports the Spanish economy contributing 11.6% to the GDP as of late 2024, its rapid growth has brought side effects. Rising rental and living costs have triggered anti-tourism protests in various tourist hotspots including Barcelona, Malága, the Balearics and the Canary Islands. The latter have become central to the anti-tourism movement, with locals carrying signs that read “Canaries have a limit.”

Although Spain’s economy is the most prosperous in Europe right now, the future for the country’s overall prosperity is still unclear. Tourism activity may go down in the light of recent protests, and the projected fall in GDP may negatively influence the Spanish economy.