Spain steals the show: Economic growth expected to overtake major global economies

SPAIN’S economy has gone from underdog to global powerhouse in recent years, and the latest projections look promising.

According to a report by the Organisation for Economic Co-operation and Development (OECD), Spain’s economic growth is set to overtake that of the US, Germany, and France.

Despite facing the worst recession among Western European nations during the COVID-19 pandemic, Spain is now emerging as the frontrunner in economic growth within the Eurozone and countries with major economies. The OECD, based in Paris, revised Spain’s growth projections upwards, in a report released on Friday, June 9.

Facts and figures

The latest forecasts from the OECD show Spain’s growth rate surpassing two per cent for 2023, with just a slight dip expected in 2024. Economists at the policy forum highlight the resilience of Spain’s economy, which has outperformed expectations.

Compared to previous estimates, the OECD has upgraded Spain’s growth forecast, raising it by four-tenths to reach 2.1 per cent for this year and increasing it by two-tenths to reach 1.9 per cent for 2024.

Although these figures fall short of the ‘exceptional’ growth rates experienced in 2022 and 2021, when Spain’s economy expanded by 5.5 per cent due to the rebound effect after the recession from the pandemic, Spain is gradually returning to a more stable growth trajectory.

Domestically

The economic weaknesses exposed during the COVID-19 crisis, particularly in sectors like hospitality and tourism, have now become strengths that contribute to Spain’s above-average growth.

The OECD, however, avoided commenting on the upcoming early elections in July, which could potentially bring about changes in government and economic policies.

Factors such as low inflation, a resilient labour market, and strong export growth are believed to be driving Spain’s economic engine. Despite increased financing costs, Spanish businesses continue to invest in capital and hire employees.

Global comparison

Spain is predicted to outshine other major economies in the OECD, surpassing the growth rates of the United States, France, Germany, Italy, the United Kingdom, Canada, and the Netherlands in both 2023 and 2024.

Furthermore, Spain’s growth rate is expected to be more than double that of the Eurozone in 2023 and four-tenths higher in 2024.

Spain’s economic prospects are on the rise, with the OECD forecasting it to outpace major economies. Despite challenges and the need for reforms, Spain’s resilience, strong labour market, and favourable conditions in sectors like tourism and exports position it as a frontrunner in the post-pandemic recovery.