2025: Spain’s economy is growing the fastest among Europe’s major economies. The trend will continue and will accelerate the Real Estate growth.
Spain’s success in integrating immigrants, coupled with its efforts to leverage tourism and a thriving services sector, has made it a standout among its peers in the eurozone. Analysts, including JP Morgan, highlight that Spain is set to remain the Western European country with the highest growth in the short and medium term, driven by its ability to rapidly and effectively incorporate a growing foreign population. This trend underscores the critical role of immigration, economic diversification, and tourism in bolstering the nation’s economy.
As of late 2024, the country’s foreign-born population reached a record 6.7 million, contributing to an overall population high of 48.9 million. Unlike other European nations, such as Germany and France, where immigrant integration has faced challenges, Spain has excelled in streamlining labor market entry for newcomers. The shared language and cultural ties with Latin America make it easier for migrants—many of whom are highly educated—to integrate quickly and contribute to economic growth. Fields like medicine, engineering, and skilled trades have benefited significantly, addressing labor shortages in key sectors. The appeal of Spain’s diverse cultural offerings and Mediterranean lifestyle also attracts many other foreign residents. Hundreds of thousands of Italians, Britons, Germans or Nordics now hold residence in Spain.
This integration has fueled Spain’s GDP growth, with immigration contributing over 20% to the country’s per capita GDP increase of nearly 3% between 2022 and 2024. Analysts credit this growth to the population boom, extensive European recovery fund investments, and the booming services industry.
Tourism continues to be a cornerstone of Spain’s economic success. In 2024, the country welcomed a staggering 94 million tourists, second only to France in global popularity. Tourism revenue has surged, with foreign overnight stays increasing by 8% as of November 2024 compared to the previous year. This growth has bolstered service exports, which remain a key driver of the economy. TBeyond tourism, other sectors like consulting, financial services, and IT are experiencing rapid expansion. These non-tourism service exports, combined with Spain’s increasing price competitiveness, have helped solidify its role as a global economic player. Productivity per worker has shown notable improvement, growing by 2% in 2024’s first three quarters, bucking broader eurozone trends.
Looking ahead, Spain’s strong immigration levels, favorable energy prices, and productivity rebound position it to maintain a growth advantage. Expected interest rate cuts by the ECB, coupled with increased private consumption and investment, will likely sustain Spain’s economic momentum. Immigration, economic diversification, and cultural openness ensure a bright future for Spain as a leading European growth engine.
Spain’s booming economy and population growth could have a profound impact on real estate, driving demand across residential, rental, and commercial sectors.
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Sources:
JP Morgan Report: Eurozone - The Spanish Growth Engine
WSJ.com
ElEconomista.es