Spain | Mea culpa

With Christmas and the start of the new year nearly upon us, it is always good to look back and review what has happened over the last 12 months. My goal here is to do a mea culpa on where we got things wrong when we laid out our economic scenario a year ago.

Key points

• Key points:
• Our most obvious “mistake” has been that Spain’s GDP growth in 2024 has been much higher than what we thought possible 12 months ago (3.1% compared to 1.5%). This, despite the fact that two of the key assumptions about the international scenario that we relied on a year ago to justify our lower growth forecast did indeed come to pass.
• First, Eurozone GDP has been pretty feeble, exactly in line with our forecasts (0.7%). Second, monetary policy has had a restrictive tone for much of the year. Both factors were always going to constrain demand-side growth, both external and internal.
• While the expansion will continue throughout 2025, growth rates are unlikely to match the highs seen in 2024. A still favorable economic outlook, with a less contractionary monetary policy, will contribute to this.
• However, a lack of investment could narrow the positive gap shown by GDP growth in Spain. It is also essential at this point to take stock of what has gone wrong and try to generate a more conducive environment for further investment growth.

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