Pablo Hernández de Cos, governor of the Bank of Spain; European Central Bank vice president Luis de Guindos; and former first vice-president and Minister of Economy Nadia Calviño, who chairs the European Investment Bank, share a clear view: 2024 will bring a notable slowdown for Spain, but a recession is not on the horizon. In fact, even with a slower tempo, the Spanish economy is expected to grow faster than the euro area average.
The Bank of Spain was among the last institutions to adjust its projections, lowering estimates for 2024 to around 1.6 percent after already revising 2023 upward to about 2.4 percent, a common practice among major institutions to present a resilient path. The outcome still places Spain at roughly twice the growth rate of the euro area, which hovered around 0.6 percent in 2023 and about 0.8 percent in 2024.
Throughout the year, various organizations and labor agencies revised their growth outlooks. The recovery in 2023 exceeded 2 percent, helped largely by a strong first quarter; yet the Spanish Chamber of Commerce warned that 2024 could fall short of the 2 percent threshold as external demand cools and some growth drivers fade.
The government projected 2.4 percent for 2024 and 2 percent for 2025, though leading research services cautioned that optimism for the longer horizon may be excessive given global headwinds.
For 2023, most forecasters anticipated upward revisions. The year began with GDP rising 0.6 percent from the previous quarter and posting an annual rate of about 4.1 percent. But momentum cooled in the mid-year, with growth slowing to 0.3 percent in the July–September period, and a year-over-year rise of roughly 1.8 percent by the end of the year.
In one of her final appearances as a member of the governing board, Calviño acknowledged ongoing uncertainties stemming from geopolitical tensions and rapid technological as well as climatic transformations that future policymakers will confront.
She also highlighted the remarkable strength of the labor market, noting that employment and wage gains occurred in the most productive sectors while Social Security records exceeded 21 million jobs and the temporary employment rate declined.
In 2024, the Spanish economy faced the impact of rising interest rates set by the ECB in its ongoing effort to bring inflation toward the 2 percent target. Spain, however, saw the inflation rate ease to about 3.1 percent by December, down from a peak near 6 percent earlier in the year.
Analysts expect inflation to continue to weigh on activity, though to a lesser degree than in the previous two years, a trend highlighted by CaixaBank Research. The inflation dynamic is expected to slow growth across the euro area, which maintains a large share of Spain’s trade links.
Funcas, a think tank drawing on forecasts from CECA members, compiled estimates from 19 labor services and projected an average growth around 2.4 percent for 2024, with a 1.6 percent pace in 2023 and in 2024 as a reference point. Higher projections for 2023 hovered around 2.5 percent, with 2024 near 2.1 percent; the downside risks suggest a modestly slower path ahead, with private consumption stabilizing while public consumption trends lower and investment rising.
The OECD, grouping advanced economies, confirmed a slowdown through 2024 for Spain as part of a wider regional trend, but emphasized that activity should remain robust. The IMF warned that increases in money prices and a softer global trade environment could weigh on growth, especially if currency and demand dynamics shift unpredictably.
The European Commission echoed these sentiments, noting that Spain is likely to outpace the eurozone average but expressing concern about the public deficit, which could stay above 3 percent of GDP. In response, the government expanded anti-crisis measures, from public transport subsidies to temporary reliefs on essential goods, with the aim of closing 2023 near 3.9 percent and targeting about 3 percent in 2024, a policy cost estimated at roughly 5.3 billion. The economic team was led by the minister of finance’s senior deputies and supported by the central bank governance structure and the economy ministry’s leadership.
On consumer prices, the consensus forecast placed CPI around 3.7 percent for 2023 (actual around 3.1 percent) and about 3.3 percent for 2024. The core inflation rate, which excludes volatile food and energy, was projected near 5.9 percent for 2024 but settled closer to 3.8 percent, with a similar path expected for 2025.
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