Spain confirms its 2,6% growth forecast for 2025 despite challenges

 

The Executive trusts that the dynamism of the private consumption will offset the negative effects of the US tariff policy and anticipates a significant reduction in unemployment in the coming years.

 

"The Spanish economy maintains its dynamism and will continue to lead growth among the main economies of the eurozone," stressed the Minister of Economy, Trade and Business. Carlos Body, during the presentation of the annual progress report and update of the macroeconomic framework to the Extraordinary Council of Ministers.

 

Regarding the maintenance of the forecasts, Minister Cuerpo explained: "This dynamism allows the Government to maintain the economic growth forecast for 2025 at 2,6%, as well as job growth."

 

Regarding the employment data, Cuerpo highlighted: "The data from the Active Population Survey Figures for the first quarter of the year confirm that there are 520.000 new jobs and that the number of employed has exceeded 22 million for the first time, in seasonally adjusted terms… Furthermore, employment is of higher quality and temporary employment has been reduced to around 15%, in European figures.”

 

Regarding the reduction of unemployment, the minister stated: “The government is thus maintaining its projection of creating an average of 480.000 jobs annually over the next four years, which will allow us to reduce the unemployment rate to below 10% by 2026 and below 9% by the end of 2028. In my opinion, this figure is close to full employment and would be on par with the best figures we experienced during the height of the construction boom… but now achieved.” without macroeconomic imbalancesbut in a structural and permanent way."

 

Referring to the factors driving growth, Cuerpo noted: "There are two factors that are central to the forecasts for 2025 and 2026: domestic demand -led by private consumption- and investment«.

 

On impact of US tariffsHe indicated: "The document presented today incorporates the impact of the tariff increase, which will reduce by one-tenth the contribution of the foreign sector to economic growthHowever, this growth will be offset by an increase in private consumption of one-tenth of a percent, so the government's forecasts remain unchanged."

 

Finally, on fiscal matters, Carlos Cuerpo concluded: "In budgetary terms, the Government is fulfilling its commitment and maintaining its deficit target of 2,5% and debt of 101,7% in 2025... the 2,5% deficit means that once we remove interest payments on the debt from the equation, we will have a budget surplus."