Spain | The economy moving forward

As the end of the year draws to a close, we find the Spanish economy in job creation mode, but with steadily increasing uncertainty over global economic policy.

Key points

• Key points:
• This uneasy tension, which we have now been enduring for several years, looks set to continue, and the big question now is when – and to what extent – it will end up feeding through to GDP.
• In the short run, the economy will remain firmly on track, prompting BBVA Research to raise, once again, its GDP growth forecast for 2024 to 3.1%.
• This improvement is down to a GDP increase in the third quarter that was one tenth of a percentage point higher than expected (0.8% in the quarter) and because the slowdown in job creation has been quieter than expected in the final stretches of 2024.
• Looking ahead, the recovery is expected to continue in the coming months, albeit in an environment affected by two major shocks. First, the flash floods that recently struck Valencia, and second, the changes that are expected to occur in the tariff policy of the United States in 2025.
• Several factors would partially offset the negative impact of these shocks, supporting GDP growth of 2.3% in 2025 and 1.7% in 2026, although certain uncertainties remain.

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