Spain: The EU's New Economic Driver

This week, the Spanish Chamber of Commerce and Industry (La Cámara) celebrates "La Fiesta," an annual showcase of Spanish culture and gastronomy.

- ANDREW J. MASIGAN

In commemoration, this piece provides an up-to-date assessment of the Spanish economy and shows how Spain is leading the European Union in growth and technological advancements.

Often overshadowed by its bigger neighbors like France, Germany, and Italy, Spain has recently emerged as the outstanding economic performer among Europe's advanced economies. Spain's economy has outgrown that of its bigger neighbors, clocking in GDP growth of 2.7 percent in 2023 and a remarkable 3.2 percent in 2024. This occurred while France eked out a growth of only 1.1 percent for both years and while Germany fell into recession. Spain outpaced the entire Eurozone, whose growth was only 0.7 percent in 2024.

What makes Spain's performance even more impressive is that it occurred amid the devastating floods that ravaged Valencia last October. The calamity shaved off 0.2 percent in economic growth.

Spain has seen more aggregate GDP growth than Germany, France, and Italy since 2008 and continues to pull ahead. If Spain is able to sustain its three percent growth rate, it will overtake Italy to become the EU's third-largest economy by 2035.

Economic drivers

There are four main drivers of Spain's economic renaissance. The first is immigration.

Spain's population skyrocketed, thanks to an influx of working-age immigrants. Since 2021, data show that despite 696,000 Spaniards retiring from the workforce, some 1.258 million entered it, giving it a net positive intake of 562,000 workers. Spain's workforce is now 21.2 million strong.

The growth of the manufacturing sector has snapped up the workforce, allowing unemployment to decrease from 12.92 percent in 2022 to only 10.6 percent in 2024.