Walter Finch
SPAIN’S economic outlook has been upgraded more than any other large economy – including even emerging countries.
The International Monetary Fund has boosted the country’s growth forecast to 2.9% for this year – outpacing even the USA and higher than the Spanish government’s own prediction of 2.7%.
The upgrade came between the IMF’s spring and autumn meetings, meaning the growth forecast has increased by one full point, outstripping every competitor.?
And Spain is set to continue its strong performance into 2025, with current projections – always subject to change – anticipating growth of 2.1%.
This two-year performance makes Spain the surprise economic success story among advanced economies over the two-year period.
Within the eurozone, only three smaller nations – Croatia (3.4%), Cyprus (3.3%) and Malta (5.0%) – are expected to grow faster this year.
The positive outlook extends to inflation, with Spain expected to see prices rise by just 1.9% by year-end, below the eurozone average of 2%.
However, unemployment remains Spain’s Achilles heel, with the jobless rate predicted to stay at 11.6% this year – the highest among major economies – before slightly improving to 11.2% in 2025.
The strong performance is particularly noteworthy given the challenging conditions in neighbouring countries, with Germany’s economy stalling and the eurozone as a whole expected to grow by just 0.8% this year.
While Spain’s economic prospects are looking bright, the country’s political landscape is shining less brightly.
Pedro Sanchez’s ruling PSOE government has been struggling with weak parliamentary support, making it difficult to pass new reforms, and the political climate is marred by toxic rhetoric and corruption accusations.
As is so often the case, public opinion does not reflect the official economic statistics.
Despite being the unexpected economic star, a recent survey found that nearly 60% of Spaniards describe the country’s financial situation as ‘bad or very bad’.
Yet paradoxically, those describing their situation as ‘good or very good’ dropped a little to a still-healthy 61.5%.
Meanwhile, personal finances are also taking a hit, with those reporting financial difficulties rising to 26.5%,
But it is concerns around accommodation that are at their highest levels, not seen since the 2007 housing bubble burst, sending the Spanish economy into a deep recession and then depression.
At that time, 37.3% of respondents listed it as the country’s number one problem.
And unsurprisingly, unemployment is the fourth most worrying issue for Spaniards.
