Spain's Q2 GDP Growth Revised Upward to 0.8%, Strongest in a Year

Economic Expansion Exceeds Expectations

Spain's economy demonstrated robust performance in the second quarter of 2025, with its Gross Domestic Product (GDP) growing by 0.8% quarter-on-quarter. This figure, released by the National Statistics Institute (INE), represents an upward revision from the preliminary estimate of 0.7% published in July. The revised growth rate marks the strongest expansion for the Spanish economy in a year, surpassing analyst expectations which had also projected 0.7% growth for the quarter.

On an annual basis, Spain's economic output expanded by 3.1% in Q2 2025, a significant increase from the preliminary reading of 2.8%. This annual growth rate also exceeded analyst projections.

Key Drivers of Domestic Demand

The stronger-than-expected growth was primarily fueled by robust domestic demand. The INE highlighted significant contributions from various sectors:

• Household spending advanced by 0.8% in Q2, up from 0.5% in the first quarter.
• Investment surged by 1.8%, a substantial increase from 0.3% in Q1.
• All main economic sectors, including manufacturing, construction, and the dominant services sector, experienced strong growth. The services sector, which accounts for more than half of Spain's GDP, was particularly buoyed by a sustained tourism boom.

Domestic demand contributed 0.8 percentage points to the overall quarter-on-quarter growth. Furthermore, the economic expansion coincided with a decline in the unemployment rate to 10.29% in the second quarter, reaching its lowest level since early 2008.

Outperforming Eurozone Peers

Spain's economic dynamism stands in stark contrast to the broader Eurozone. In the same period, the Eurozone's GDP grew by a mere 0.1%, with major economies like Germany and Italy experiencing contractions. Spain has consistently been one of the fastest-growing major economies within the Eurozone.

Economy Minister Carlos Cuerpo stated that this strong performance supports the Spanish government's recent upgrade of its 2025 GDP forecast to 2.7%. The continued resilience and growth of the Spanish economy provide a positive outlook amidst a challenging international economic landscape.