Spain's Economy Demonstrates Resilience in Q3 2025 Amidst Export Decline

Economic Growth Driven by Domestic Strength

Spain's economy expanded by 0.6% in the third quarter of 2025, according to preliminary estimates released by the National Statistics Institute (INE). This figure, while a slight moderation from the 0.8% growth recorded in the second quarter, underscores the continued resilience of the Spanish economy. The primary catalyst for this expansion was strong domestic demand, which significantly offset a downturn in external trade.

Key components contributing to the robust domestic performance include:

• Household consumption, which saw an increase of 1.2%.
• Government spending, rising by 1.1%.
• Investment, which expanded by 1.7%.

Domestic demand alone contributed 1.2 percentage points to the overall GDP growth, highlighting its crucial role in the quarter's economic activity.

External Trade Faces Headwinds

In contrast to the strong domestic picture, Spain's external sector experienced a slowdown. Exports of goods and services registered a decline of 0.6% in the third quarter of 2025, marking an end to a two-year period of consecutive gains. This contraction in exports meant that external demand subtracted 0.6 percentage points from the country's GDP growth. The decrease in exports was accompanied by an increase in imports of 1.1%.

Broader Economic Context and Outlook

Despite the challenges in external trade, Spain's economic performance in Q3 2025 continues to outpace many of its peers within the Eurozone. On a year-on-year basis, the Gross Domestic Product (GDP) increased by 2.8%, a slight decrease from the 3.1% recorded in the previous quarter. Analysts point to several factors underpinning this sustained resilience, including a strong tourism sector, favorable energy dynamics, and firm domestic consumption. The government has credited the solid results to 'the strength of the labour market and improved household purchasing power.'