On 28 and 29 January 2025 Spain’s statistics office published the labour force survey and the flash GDP estimate for the fourth quarter: Spain ended 2024 as the fastest-growing large economy in the euro area.
Spain’s National Statistics Institute (INE) published its flash national accounts for the fourth quarter of 2024 on 29 January 2025. Gross domestic product grew 0.8% between October and December compared with the previous quarter, a pace similar to the third, and the year as a whole closed with growth of 3.2%, half a point more than in 2023. A day earlier, the labour force survey (EPA) had put the unemployment rate at 10.61%.
What we know
With 3.2%, Spain was the fastest-growing large economy in the euro area in 2024, well ahead of Germany, which ended the year in negative territory, France and Italy. These are flash figures: the INE revises them in the following months and they may change by a tenth of a point or so.
The fourth-quarter labour force survey recorded 21,857,900 people in work, a record, 34,800 more than in the previous quarter. The number of unemployed fell to 2,595,500 and the unemployment rate stood at 10.61%, six tenths lower than in the third quarter and the lowest since 2008.
Why Spain is growing
Growth came mainly from domestic demand: spending by households, whose purchasing power recovered as inflation eased, and public spending. It also came from tourism, which broke records again, and from exports of non-tourism services such as consulting and technology. On top of that there is a demographic factor: the population is growing through immigration, which adds workers and consumers.
Analysts also point to the weak spots. Business investment remains below pre-pandemic levels, output per worker is barely improving and unemployment, though falling, is still the highest in the European Union. The price and scarcity of housing in the big cities have become one of the main concerns.
What to bear in mind
For a business, sustained growth in domestic demand is good news, but it does not remove cost pressure: wages, the minimum wage and social contributions all rise in 2025. For families, a strong labour market coincides with ever harder access to housing in Barcelona, Madrid and other cities.
Forecasts for 2025 pointed to somewhat slower growth, around 2.5%, still well above the European average.
Spain’s growth rests on more workers; the outstanding challenge is for each of them to produce more.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
