Why is Spain’s economy in good affliction

Spain’s prosperous economy outperforms its European neighbors because tourism, foreign investment and immigration helps in fuel growth.

The southern European state is still Pioneer growth In the euro area with the annual GDP expected to increase by 2.5 % this year, while France, Germany and Italy, respectively, are expected to expand 0.6 %, 0 % and 0.7 %.

Spain’s gross domestic product exceeded the expectations in the second quarter, increasing by 0.7 %, higher than Reuters expectations by 0.6 %. The growth was also higher than the previous three months, which settled 0.6 %, showing data from the Spanish National Statistics Institute (INE).

“For the second year in a row, we will be the first advanced economy in terms of gross domestic product growth,” Carlos Carlos Carlos Carlos told CNBC in April.

He added: “Spain is very supernatural now in terms of growth. It is also a great place to invest.”

The success of Spain’s economy depends on high consumption and investment, as well as tourism and European funds from the next generation and immigration.

“It is not just a tourism, but also non-misfortune. We are more in terms of services for companies like that, accountability services, and financial services, more than their export in terms of tourism-100 billion euros (116.8 billion dollars) with regard to 94.95 billion (euros in tourism).

Despite this economic growth, many challenges are awaiting Spain, such as maintaining wages in line with the high cost of living, climate change, and more at all at all. Divide political scene And the fact that the country has The highest youth employment rate In the European Union.

“What will happen with customs tariffs and international trade, especially in an economy like Spain, where goods exports have increased significantly over the past fifteen years?” Cardoso said.

“The second challenge is that savings rates are still relatively high. The third source is these low investment rates. Finally, how to reduce government deficit and public debt.”

However, tourism in Spain represents About 12 % From the country’s gross domestic product, as it benefits from the recovery of the epidemic, and the cheaper prices compared to other Western European nations.

The success of the sector sparked a violent reaction from local communities about the flow of people who visit historical and popular sites, especially during the summer months. Last year, the demonstrators in Barcelona were seen spraying travelers with water guns and screaming “tourists to return.”

The sector can also rely on its general strength Compared to 2023.

The creation of job opportunities also supports high migration. While other European countries are closing their borders, Spain plans to welcome about a million immigrants over the next three years, through work visa plans and granting permits for non -documented workers.

“90 % of the increase in the workforce since 2021 comes from migration,” BBVA Research told CNBC.

“This allows the services sector to expand. This is to maintain relatively competition in terms of employment costs, and allows, for example, that prices in services remain relatively included in a high inflationary environment.”

LAS YEAR, most people who migrate to Spain came from Colombia, Venezuela and Morocco.

“Latin America’s economies, some of which do not work relatively well, so there is a factor for this. There is also the fact that migration to the United States has become more difficult, so people wander and see alternatives,” Cardoso added.

Spain’s economy has also been strengthened by the European Union European Union funds, which allowed 163 billion euros to Spain, through grants and loans. The country is the second largest beneficiary of this assistance in restoring the epidemic, after Italy.

Spain Cuerpo CNBC has told 70 % of grants – 55 billion euros – has already dispersed.

“This was a program that was partially designed to try to help recover after the epidemic,” said Cardoso.

“So the government gave the priority of investment projects that had already had a plan for it, and therefore they have a relatively low impact on the economy.”

However, the Spanish government aims to use these funds in sectors such as tourism services exports, including renewable energy sources.

The ARCTECH, which was established in China in 2009, opened its European headquarters in Madrid in 2024. PV cells convert sunlight directly into electricity. It is a prosperous renewable energy source that can lead to Low electricity costs.

“It is possible that Spain is the site in Europe where the largest photovoltaic has been done,” CNBC told CNBC.

“The solar ecosystem is really here (in Spain), from the novice engineer, to the money that invests in these large assets.”

The company is now boasting 17 branches outside China, plans to expand in Eastern Europe, as well as plans to diversify storage solutions.

“Things happen here. We use Valencia Port to import many sites in Europe,” Magalhaes added.

Like Arctech, many foreign companies plan to take advantage of the country’s low energy costs.

Auto giant Stelantis It collaborated with the Catl Battle Manufacturer in late 2024, Announcing plans To build a 4.3 billion dollars phosphate battery in Lithium in Zarza, northeastern Spain.

Foreign direct investment in Spain is also strong, with the country Fourth rating is the most attractive country In the European Union of Investors. China alone announced that it will invest up to 11 billion euros in Spain in 2025, as it is preparing for 33 new projects in the country.

“When you look from where this investment comes from, the largest investor in Spain is the United States,” said Cuerbo.

“But we are also attracting investment from other parts of the world, including China, in specific sectors related to the Jams of renewal, to sustainable movement as well, and this is of course part of our economic security agenda.”