Key facts
- Spain's economy is expected to remain resilient despite the Iran war and its global impact.
- Economy Minister Carlos Cuerpo cited economic momentum for an improved growth forecast.
- Spain's economy grew 2.8% last year and 3.5% in 2024, outperforming EU peers.
- The Bank of Spain forecasts 2.3% growth for the current year, while the IMF predicts 2.1%.
- Inflation in Spain was 3.2% in June, with government measures in place to mitigate economic shocks.
Spain's economy is demonstrating resilience in the face of global turmoil, including the ongoing conflict involving Iran and its impact on energy markets, according to Economy Minister Carlos Cuerpo. He indicated that the economy's momentum supports an improved outlook, with an expected growth of approximately 0.64 percent in the second quarter.
Spain has consistently outperformed its European Union peers, achieving 2.8 percent growth last year and 3.5 percent in 2024, driven by robust consumer demand, exports, and a strong tourism sector. Despite fears of a slowdown linked to the Iran war, the Bank of Spain forecasts 2.3 percent growth for the current year, while the International Monetary Fund projects 2.1 percent.
Cuerpo highlighted Spain's capacity to handle economic shocks with greater flexibility than in the past. The closure of the Strait of Hormuz by Iran, in response to US-Israeli actions, has led to volatility in global energy markets and increased inflation worldwide. However, Spain's inflation rate remained stable at 3.2 percent in June for the third consecutive month, according to provisional data from the National Statistics Institute, even with year-on-year increases in electricity and gas prices.
To mitigate the impact of these global events, the Spanish government implemented support measures totaling five billion euros in March, including tax cuts and direct subsidies. While support for agriculture and transport will continue, value-added tax (VAT) cuts on fuel are set to expire in July.