Spain GDP Growth Beats Forecasts, Rising 0.7% in Second Quarter

Spain’s Gross Domestic Product (GDP) expanded by 0.7% in the second quarter of 2025 compared to the previous three-month period, surpassing the 0.6% growth forecast by economists. The data, released by Spain’s National Statistics Institute (INE), signals continued resilience in the eurozone’s fourth-largest economy amid a mixed global outlook.

Quarterly Growth Exceeds Market Expectations

The 0.7% quarter-on-quarter (QoQ) reading for Q2 2025 marks an acceleration from the 0.5% growth recorded in the first quarter of the year. Analysts had broadly anticipated a stable expansion of 0.6%, but stronger-than-expected contributions from services and export activity pushed the figure higher. This performance places Spain among the faster-growing economies in the European Union during the period.

Key Drivers Behind the Beat

Preliminary data suggests that domestic demand, particularly in the tourism and hospitality sectors, remained robust during the spring months. The services sector, which accounts for a significant share of Spanish economic output, benefited from a strong tourist season and steady consumer spending. Meanwhile, exports of goods and services also provided a positive contribution, supported by competitive pricing and diversified trade partnerships outside the eurozone. Industrial production and construction activity showed moderate but stable growth, avoiding the contraction seen in some neighboring economies.

Implications for Monetary Policy and the Eurozone

The stronger-than-expected GDP print may influence the European Central Bank’s assessment of the Spanish economy as it calibrates interest rate policy. While inflation in Spain has moderated, the continued growth momentum gives the ECB less urgency to consider rate cuts in the near term. For investors, the data reinforces Spain’s relative economic stability within the eurozone, potentially supporting confidence in Spanish sovereign debt and equity markets.

Conclusion

Spain’s GDP growth of 0.7% QoQ in Q2 2025, above the 0.6% consensus forecast, underscores the economy’s ongoing recovery momentum. Driven by services, tourism, and exports, the data provides a positive signal for the second half of the year, though global risks and domestic political factors remain under watch. The full breakdown of sectoral contributions is expected in the coming weeks.

FAQs

Q1: What was Spain’s GDP growth in Q2 2025?
Spain’s GDP grew by 0.7% quarter-on-quarter in the second quarter of 2025, beating the 0.6% forecast.

Q2: How does this compare to the previous quarter?
It represents an acceleration from 0.5% QoQ growth recorded in Q1 2025.

Q3: Which sectors drove the growth?
Preliminary indications point to strong contributions from the services sector, particularly tourism and hospitality, as well as steady export activity.