Spain’s economy maintained its upward trajectory in the first quarter of 2025, growing by 0.6% compared to the previous quarter, according to data released Tuesday by the National Statistics Institute (INE). While slightly slower than the revised 0.7% expansion seen in the final quarter of 2024, the country continues to outperform many of its European peers.
On a year-on-year basis, gross domestic product (GDP) rose by 2.8%, down from 3.3% in the previous quarter. Despite the slight deceleration, the Spanish economy is benefiting from strong domestic demand, resilient consumer spending, and the ongoing support of rising wages and high household savings.
Quarterly growth was primarily driven by domestic demand, which contributed 0.4 percentage points to the total figure. External demand, meanwhile, added 0.2 percentage points. Over the year, domestic consumption proved to be the key engine of expansion, contributing 3.2 points to GDP growth, although this was partially offset by a -0.4 point drag from foreign trade.
Economists expect Spain’s economic resilience to continue through the year, buoyed by improving labour market conditions, increased consumer confidence, and a steady influx of immigration, which is helping to support both demand and productivity.
“This quarter’s figures confirm that Spain remains one of the most dynamic economies in the eurozone,” said a government official, pointing to robust consumption patterns and relative insulation from recent global trade disruptions — at least for now.
The quarterly report covers economic activity from January to March, meaning the data does not yet reflect the potential impact of new trade tariffs implemented by U.S. President Donald Trump, which could affect global supply chains in the months ahead.
In a separate release on Tuesday, Spain’s inflation figures showed a modest rise in consumer prices. The Consumer Price Index (CPI) increased by 0.6% month-on-month in April, compared to just 0.1% in March. On an annual basis, inflation came in at 2.2%, slightly lower than the 2.3% recorded the previous month. The decline was attributed to falling electricity and fuel prices.
While inflation remains within manageable levels, policymakers are closely watching external risks, including global trade tensions and potential energy price volatility, as they assess the outlook for the rest of 2025.
For now, however, Spain appears well-positioned to maintain stable growth, setting it apart from more sluggish performances across much of the euro area.
