Concept of economic growth in Spain. A hand holds a bag with money. There’s an upward arrow in the background.
Spain’s sizzling success: how the nation became the envy of Europe.
Credit: Shutterstock, ilikeyellow
The world’s best-performing economy is flexing its muscles, and it appears unstoppable at the moment.
Many business leaders once feared that COVID would drive a stake through the heart of Spain’s tourism industry. There was a moment when people thought tourism might never be the same. But that dark cloud has lifted… The bounce-back is in full swing, with Spain flexing its economic muscles and leaving the rest of Europe green (and red and yellow) with envy.
In 2024, Spain welcomed a record 94 million visitors, hot on the heels of France’s 100 million. With so many keen to taste its famous tapas and sangria, Spain is now tussling to be the world’s biggest tourist magnet, and pivoting from cheap and cheerful to high-end tourism. And it’s paying off: the nation’s GDP rocketed by 3.2% last year – dwarfing Germany’s -0.2%, France’s 1.1%, Italy’s 0.5%, and Britain’s modest 0.9%.
The world’s best-performing economy
The Economist magazine has crowned Spain the world’s best-performing economy. Unsurprisingly, ministers in Madrid are chuffed to bits. According to experts, the Spanish model is successful because it’s balanced. Tourism is key, but so are financial services, technology, specialised expertise, and investment. They’re currently powering a staggering 40% of eurozone growth!
With up to €163bn (£136bn) in EU post-pandemic recovery funds set to pour in by 2026, Spain has been able to turbo-charge the transition to green energy, enhance its national rail system, and invest heavily in its electric vehicle industry. It’s worth noting that public spending accounts for around half of the country’s recent growth.
While other European heavyweights suffer from sky-high energy costs, industrial woes, and stiff competition from China, Spain’s more services-driven economy has proved resilient. It’s an Iberian success story – quite literally, given the so-called ‘Iberian exception’ that allowed Spain and Portugal to cap gas prices for electricity, shielding residents from the worst of the energy crisis.
Green energy and motoring ahead
As Europe’s second-largest car producer, Spain is eager to shift into top gear on electric vehicle production. According to experts, there’s no point in making zero-emission cars with dirty energy, and Spain understands this. The country is currently the EU’s second-largest renewable energy generator. With sunshine aplenty and the wind in its sails, Spain’s green-energy future looks brighter than a midday Mediterranean sky. Investors are already scrambling to take advantage of the country’s renewable infrastructure.
Jobs on the up in Spain
Yet it’s not all sangria and sunshine: Spain has long been hounded by high unemployment, the biggest in the EU. But things are looking up – jobless numbers dipped to 10.6% at the end of 2024, the lowest in over 15 years, with a record 22 million people now in work.
A radical labour reform – restricting the overuse of temporary contracts and encouraging flexible, permanent positions – is seen as a driving factor. Immigration, meanwhile, remains a political hot potato, but Prime Minister Pedro Sánchez insists newcomers are ‘fundamental’ to keeping the economy humming in a rapidly ageing society with one of the world’s longest life expectancies.
Read more original news in English from around Europe.
Read more news in English from around Spain.
