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In this article, we focus on analysing the past evolution and future outlook for potential GDP growth. This is a key variable, since it offers an indication of our economy’s underlying growth trend.In other words, it tells us how much the economy can grow by in a sustained manner in the absence of shocks if all of the economy’s productive capacity is used and no imbalances arise.

As we approach the end of a good year from a macroeconomic perspective, 2025 is expected to be another buoyant year for the Spanish economy thanks to a growing role of private domestic demand.

The savings of Spaniards went from 5,800 euros per household in 2023 to more than 7,000 in 2024. Why has the household savings rate increased and what do we expect for 2025?

The combination of restrictions on the use of temporary contracts, coupled with the push for the use of permanent discontinuous contracts to channel work that is intermittent but recurring, has contributed to the reduction in the temporary employment rate, one of the main handicaps of Spain’s labour market and addressing it was one of the objectives pursued by the last labour reform.

The goal has been identified and diagnosed for some time, but it is difficult to achieve. It requires patience, resources, both public and private, and determination and cooperation among the various institutions and agents involved, precisely because the challenge is so great. 

The National Statistics Institute’s upward revision, combined with the buoyancy we have continued to observe in Q3, has led CaixaBank Research to revise its growth forecast for 2025 from 2.4% to 2.9%. With only three months remaining until the end of the year, it seems unlikely that growth will be far off 3%.

The government has presented its 2025 Annual Progress Report, which anticipates an improvement in the general government balance thanks to sustained economic growth, the end of the temporary tax cuts and the containment of expenditure. 

In our previous article dedicated to analysing the evolution of investment in Spain, we focused on describing the pattern of investment by type of asset and by sector, and on comparing it with the euro area. In this second article, we want to focus on incentives for investment.

How innovative is Spain relative to its European partners? We analyse the evolution of Spain’s position in the European Commission’s innovation index.

Following the rally of 2024, the data for Q1 have confirmed that the market is in the midst of the expansionary phase of the cycle, which has led us to revise upwards our forecast scenario.

There are five factors that suggest that the gap between Spain’s GDP and its pre-pandemic trajectory will steadily close through growth remaining above the historical average of 2.0%.

Foreign demand is a fundamental pillar in explaining the strength of housing demand in the current expansionary cycle. Much of this demand comes from foreigners who reside in Spain – a group that has been on the rise in recent years with the recent influx of immigrants into our country.

Why is productivity so low in Spain and why has it grown so little in recent years? Although the answer is complex and a whole range of factors are involved, two of the key causes of the Spanish economy’s low labour productivity, as well as the low growth thereof, are the country’s production specialisation and the small size of its companies.

This month, we have updated our forecast scenario for the Spanish economy. Although we now expect growth to be slightly lower than previously anticipated, the message remains broadly positive and there are several elements sustaining the Spanish economy’s dynamic growth.

What is expected in 2022 in terms of sustainable investments? We gauge the importance of environmental sustainability in the European NGEU funds as part of the Recovery and Resilience Mechanism.

The good growth data for the Spanish economy in the final stretch of 2024 lead us to revise upwards our GDP growth forecast for 2025. However, the greater likelihood of tariff tensions between the US and the EU invites us to remain cautious. In this regard, we expect the economy to grow by 2.5% in 2025, above the 2.3% we were previously predicting, albeit somewhat below the revision we could have made in the absence of this uncertainty factor.

The Spanish economy is growing at a good pace – more so than expected – and this leads us here at CaixaBank Research to revise our growth forecasts for 2025 upwards from 2.3% to 2.5%. Despite the good news, the focus is not on the improvement in the forecasts, but rather on the uncertainty that surrounds them. 

In 2024, Spain reduced its exports to the European Union and the United States, so it had to seek out opportunities in new markets in order to diversify and strengthen its trade relations. These new markets primarily included countries in ASEAN, Latin America and the Caribbean Islands, as well as Oceania.

The energy crisis has served as an incentive within the EU to accelerate the transition to energy sources that are more environmentally friendly and less dependent on fossil fuels, but this is seen as more of a medium-term goal.