The Spanish economy remains strong: “2025 will also be a solid year”

Spain's GDP grew by 3.2% last year, marking a half-point increase over 2023, as confirmed by the National Statistics Institute (INE) this Wednesday. This is a positive figure that, according to Alberto Matellán, General Manager of La Financière Responsable, “should be viewed with optimism.” Moreover, “all signs suggest that growth figures for 2025 will also be very favorable.” Nevertheless, the Spanish economy still faces certain “vulnerabilities,” primarily because a large part of this growth can be attributed to public consumption. In a related development, Spanish Prime Minister Pedro Sánchez unveiled a contingency plan to deal with potential tariffs, along with another aimed at increasing defense spending. These fiscal expansion measures "tend to be beneficial" in the short term and "could help sustain growth," states Matellán. However, for such a fiscal plan to be effective, it must be economically viable, generating more revenue than it costs. Otherwise, "it will have a negative impact in the long run and burden the economy with debt," he explains. On the global stage, the world is still watching Donald Trump's tariff policy and its potential impact, which, according to Alberto Matellán, "has so far mainly affected confidence, but could soon affect economic activity." For now, however, this pessimism is largely "priced in" by the markets, offset by factors such as fiscal expansion in Europe. This explains why the European economy is outperforming the US. The positive trend in Europe is also supported by economic data, which, while not stellar, have been "better than expected." Regarding the US economy, which is being closely watched for indicators that could signal its trajectory, the economist notes that some figures are falling short of expectations. As a result, it's likely that this year's growth will be "lower" (with a projected increase of 2.8% in 2024), though that doesn’t mean there will be a sudden slowdown: "I highly doubt it will collapse or turn negative." This week, inflation in the United Kingdom came in lower than expected, at 2.8% year-on-year for February—a “positive sign,” according to Matellán. However, he points out that “it doesn’t change the underlying situation: reducing inflation is proving difficult,” much like in other parts of Europe. That said, the UK’s inflation is currently less influenced by monetary factors and more linked to trade and fiscal challenges.