Why in the Spanish economy all so good

Spain’s fast economy is superior to its European neighbors as tourism, foreign investment and immigration that help fuel growth.

Southern European Country remains Leading growth The euro area with an annual gross domestic product is projected by 2.5%this year, while the economy of France, Germany and Italy, respectively, are projected by 0.6%, 0%and 0.7%.

In the second quarter of Spain, Spain exceeded expectations, increasing 0.7%than the Reuters forecast by 0.6%. The growth was also higher than in the previous three months, indicated by 0.6%, showed data from the Spanish National Institute of Statistics (INE).

“For the second year in a row, we will be an expanded number one economy in terms of GDP growth,” Spanish Minister Carlos Kuerpo said in April.

“Spain is now a great alien in terms of growth. It is also a great place for investment,” he added.

The success of the Spanish economy relies on high consumption and investment, as well as tourism, European funds next generation and immigration.

“It is not only tourism, it is also not tourism services. We export more in terms of services to firms such as this, accountability services, financial services than we export in terms of tourism-100 euros (116.8 billion dollars) relative to 94.95 billion (euro in tourism).

Despite this economic growth, several problems are waiting for Spain, such as keeping payment according to life costs, climate change, more Divided Political Scene and what in the country is The highest level of employment of youth In the EU.

“What will happen to the tariffs and international trade, especially in the economy, like Spain, where has exports of goods have increased significantly over the last 15 years?” said Cardos.

“The second problem is that the savings level remains relatively high. The third source is such a low investment rate. Finally, how to reduce government deficits and government debt.”

However, tourism in Spain represents About 12% From the country’s GDP because it benefits from a pandemic rebound and cheaper prices compared to other Western European countries.

The success of the sector has caused the reaction of local communities over the influx of people who visit historical and popular sites, especially in the peak summer months. Last year, in June, participants of the protest rally in Barcelona were spotted as the travelers sprayed with water guns and shouted “Tourists go home”.

The sector can also count on labor growth in almost 3 million as of 2024, progress in 9.7% Compared to 2023.

Creating jobs is also supported by high immigration. While other European countries close their borders, Spain plans to welcome almost a million migrants over the next three years, through working visa schemes and providing residence permits for unregistered employees.

“90% of the increase in labor since 2021 comes from immigration,” said BBVA Research Chief Economist Miguel Cardos.

“This allows the service sector to expand. It supports firms relatively competitive in terms of increasing work costs, and it allows, for example, services remain relatively contained in high inflation.”

Last year, most people who crossed Spain came from Colombia, Venezuela and Morocco.

“Latin American economies, some do not have relatively good, so there is this factor. There is the fact that immigration in the US has become more difficult, and therefore people turn and see alternatives,” Cardos added.

The Spanish economy was also supported by the European Union funds, which made 163 billion euros available to Spain through grants and loans. The country is the second largest beneficiary of this pandemic recovery assistance after Italy.

Spain Cuerpo reported CNBC that 70% of grants – 55 billion euros are already scattered.

“It was a program developed partially to try to help recovery after a pandemic,” Cardos said.

“Thus, the government prioritized the investment project they already had a plan, and therefore they have a relatively low multiplication effect in the economy.”

However, the Spanish government is aimed at using these funds in sectors such as exports not to tourism, including renewable energy sources.

Photovoltaics Tracker Arctech, founded in China in 2009, opened its European headquarters in Madrid in 2024. Photoelectric cells convert sunlight directly into electricity. This is an increasing source of renewable energy that can lead to Low Electricity Costs.

“Spain is probably a place in Europe where the most PV was made,” said CNBC EU and CEO EU and Na Markets Pedro Magalhaes.

“The solar ecosystem is really here (in Spain) from the junior engineer, up to the funds that invest in these big assets.”

Now the company boasts 17 branches outside China and plans to expand in Eastern Europe, and plans to diversify storage solutions.

“Everything is happening here. We use the Valencia port to import and distribute in many places in Europe,” Magalhas added.

Like Arctech, many foreign companies plan to use the low cost of the country.

Car Stellantis Combined with the CATL battery manufacturer at the end of 2024, Announcement of plans To build a $ 4.3 billion battery plant, northeast Spain.

Direct foreign investments in Spain are also strong, with the country Rating as the fourth most attractive country In the EU for investors. China alone stated that in 2025 he would invest up to 11 billion euros if it was prepared for a record 33 new projects in the country.

“If you look where these investments come from, we are the largest investor in Spain,” Kuerpo said.

“But we also attract investment from other parts of the world, including in China, in specific sectors related to renewable sources, and to sustainable mobility, and of course, it is always part of our economic security agenda.”