Spain’s economy is thriving: Why it’s growing more than its EU rivals

The Spanish economy is thriving, with tourism, domestic spending, and investment set to continue propelling growth this year.

Spain’s economy is witnessing a positive momentum, outshining its European peers with robust growth figures, buoyed by a healthy domestic consumption and a strong investment climate.

Spain’s IBEX 35 Index has reached its highest point since May 2017. Additionally, Spanish house prices rose by 4.2% in 2023, well above the pace seen in other European markets.

In the final quarter of 2023, the Spanish economy advanced at 0.6% annual pace, following a 0.4% expansion in the preceding period. This growth surge was predominantly powered by resilient domestic demand, defying persistent inflationary pressures and elevated interest rates.

Remarkably, Spain’s growth trajectory far surpassed the eurozone and EU averages, both stagnating at 0%. Moreover, Spain witnessed one of the strongest increases in new employment in Europe during the fourth quarter of 2023, trailing only behind Romania (+1.5%) and Malta (+1.4%).

Retail sales in the Iberian nation soared by 1.9% year-on-year in February 2024, marking the 15th consecutive annual increase. However, while Spanish inflation has notably retreated from the double-digit rates seen in 2022, it still hovers significantly above pre-pandemic levels.

Despite a reduction from the double-digit inflation rates seen in 2022, Spain’s inflation remains above pre-pandemic levels.

In March 2024, Spain’s consumer price inflation rate rose to 3.2% year-on-year, aligning with market projections and edging up from February’s six-month low of 2.8%. Yet, the core inflation rate, excluding volatile components such as food and energy, tapered to 3.3%, the lowest level since February 2022.

Spain’s economic growth has surpassed the eurozone and EU averages, with a remarkable increase in new employment. Despite a reduction from 2022, inflation remains notably above pre-pandemic levels. Retail sales soared in February 2024, marking continuous growth. However, March 2024 saw a rise in consumer price inflation. As Spain navigates these economic dynamics, individuals applying for business visas should stay informed. For assistance with visa applications, visit spainvisa.ae.