Spain’s economy has surged ahead of its Eurozone peers since 2023, prompting debate over how long the so-called “Spanish economic miracle” can last.
According to Erste Group Research, Spain’s growth has consistently outpaced the Eurozone average, even as Germany and Austria grapple with persistent recessions.
In the first half of 2025, Spanish GDP growth reached 2.8%, compared with 0.9% in the Eurozone and just 0.3% in Germany.
Several factors have fueled Spain’s performance. The country continues to benefit from EU recovery plan funds, which amount to as much as 1% of GDP per year.
Repeated minimum wage increases have strengthened household consumption, while labor productivity has improved steadily. By contrast, productivity has fallen in France and Italy.
Migration flows from Latin America and South America have also played a role. With no language barriers, workers have integrated rapidly into the labor market, driving employment growth of 9% since 2020.
That compares with a 4% rise in the Eurozone and just 2% in Germany and Austria over the same period.
Spain’s energy sector has added another advantage. Favorable conditions for solar and wind power have lowered electricity costs to below the European average.
This has attracted investment not only in traditional industries but also in sectors such as data centers and artificial intelligence, where energy costs are decisive.
The momentum has improved Spain’s fiscal position as well. The country’s stronger budget outlook has been rewarded by capital markets, with Spanish government bond risk premiums now lower than those of France.
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