The second quarter of 2025 has confirmed the strength of the Spanish economy, which grew by a quarterly 0.7% driven by the strength of domestic demand. This advance, superior to that scheduled just a few months ago, has led to the increase in growth estimation for the whole year to a GDP growth of 2.7% annual, consolidating Spain as one of the most dynamic economies of the eurozone. The main engine of this growth has been the consumption of households, which has recovered rates of the quarterly 0.8% thanks to the improvement of purchasing power labor and contained inflation. The investment has also surprised upwards, especially in residential construction and team goods, supported by public housing programs and the execution of European funds. The labor market has been key in this evolution of the Spanish economy. The Active Population Survey (EPA) of the second quarter of 2025 revealed an increase of more than 500,000 employed, the greatest increase in a second quarter since 2018. The unemployment rate was reduced to 10.3%, its lowest level since 2008, in a context of increasing the active population, especially among people with dual nationality or foreigners. This improvement in the labor market is not only quantitative, but also qualitative: indefinite employment is growing full time, and the reduction of temporality is consolidated. Despite the adverse international environment – marked by commercial tensions and the entry into force of the new tariff of 15% of the United States to European exports -, the Spanish economy has shown a remarkable capacity for resistance. Its low direct exposure (not indirect) made a moderate impact or, at least, less than other European economies, such as Germany or France. In spite of this, it is expected that this commercial agreement will end up impacting the third quarter (when it comes into force), which has led to slightly adjusting the forecast for that period. However, the risk balance remains relatively balanced, with domestic demand as the main growth anchor for national GDP. The second quarter has been a turning point that reinforces the confidence in the ability of the Spanish economy to continue growing in an uncertain environment, thanks to some solid internal foundations. MARÍA Romero and David Tinajero are professors of AFI Global Education.
