Economic growth eases in the third quarter of 2025

GDP growth still above euro area average: According to a preliminary reading, Spain's GDP grew 0.6% in seasonally adjusted quarter-on-quarter terms in Q3, following a 0.8% expansion in the previous quarter. Despite slowing, GDP growth remained comfortably above the euro area average, as has been almost always the case since the start of the post-pandemic recovery in late 2021.

External sector weakens and domestic sector strengthens: Compared with the prior quarter's data, figures in Q3 worsened for exports of goods and services (-0.6% on a seasonally adjusted quarter-on-quarter basis vs +1.3% in Q2) and imports of goods and services (+1.1% vs +1.6% in Q2). As a result, net trade subtracted 0.6 percentage points from GDP growth. In contrast, readings picked up for private consumption (+1.2% vs +0.7% in Q2), government consumption (+1.1% vs 0.0% in Q2) and fixed investment (+1.7% vs +0.7% in Q2). Consequently, domestic demand added 1.2 percentage points to GDP growth, likely supported by lower interest rates and continued inflows of EU funds. On an annual basis, GDP grew 2.8% in Q3, following a 3.0% expansion in the prior quarter.

GDP growth forecasts upgraded: Our panel of economists has continued to raise its forecasts for Spain’s GDP growth this year, with further upgrades in recent weeks. The Q3 reading suggests that strong domestic demand—partly bolstered by lower interest rates—should be able to countervail the impact of slowing tourism growth. All in all, sequential GDP growth is set to slow slightly further in Q4, before stabilizing through the end of 2026.

Panelist insight: ING’s Ruben Dewitte said: “The latest figures suggest Spain is on a normalisation path from the height of a positive business cycle. Leading indicators such as manufacturing PMIs and DG ECFIN business surveys point to a cooling in industrial momentum. Tourism also shows signs of deceleration, albeit from elevated levels.”

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