Spain’s economy reinvention: how long will it last? (oct. 2025)

Despite the geopolitical and commercial uncertainties and challenges, Spain keeps as one of the fastest growing countries of the advanced economies. How sustainable is this growth?

Amid all the uncertainties of the world economy this year, the International Monetary Fund (IMF) shows a lower forecast in the World Economic Outlook in October for the world and for the biggest advanced economies, compared with the estimates in January.

However, the forecast for Spain goes in the opposite direction: the estimate in October is 0.6 percentage points higher than the estimate in January.

Source: IMF World Economic Outlook, January and October 2025

This forecast is preceded by a strong growth in 2024, superior to the performance of the main economies in the European Union.

Source: GDP at market prices, Chain linked volumes, Eurostat

Beyond tourism and real estate, the real engine now running under Spain’s economy is the surge in the NACE M-N sector, that covers professional, scientific, technical, administrative and support services. According to INE (Statistics National Institute), the M-N sector had an annual growth of 4.3% in 2024, not the fastest sector among the 12 economic sectors, but above the total growth of Spain’s economy, that was 3.5%. Now, during the first half of 2025, with the economy decelerating, this sector shows exactly the opposite behavior: while the total economy is growing 2.7% compared to the first half of 2024, the professional and technical sector is growing 5.1%, a clear acceleration that is making it the fastest sector in the country.

This behavior is far from accidental. It is part of a modernization strategy for the economy. One of the action lines in that strategy is the collaboration of the government with the private sector in digitalization and cybersecurity.  Óscar López, Minister for Digital Transformation and the Civil Service, declared in an event in May with Spanish cybersecurity companies “Our goal is clear, not only to protect our digital territory, but to consolidate as a strategic actor at the forefront of European and world cybersecurity. For that, public-private collaboration will be fundamental”.

Another line of action is the institutional reforms to improve the investment climate. In January, President Pedro Sánchez affirmed at the closing of the 15^th edition of the “Spain Investors Day” that “…the Executive wants Spain to again be ‘the best economy in the world’ in 2025”, after achieving this milestone in 2024, as published in The Economist in December 2024.

Finally, Spain is also relying on large foreign tech investment. Oracle announced in June 2024 an investment over $1 billion USD “to meet the rapidly growing demand for its AI and cloud services in Spain”.

This is in the technology sector, but there is also growth in the Consulting and digital transformation services for SMEs, in the Legal, compliance and ESG advisory to comply with new EU rules, and in the Facility and property management services, since build-to-rent growth and real estate funds outsource operations to third-party specialists.

Growth is likely to moderate in 2026, with an estimate of 2% according to IMF and the Spanish Government, still at double rates of the biggest economies in the European Union, with a thrust from the M-N sector.

These results are not fruit of post-pandemic rebound, but a clear structural reinvention. At its core is a growth model based on knowledge-intensive services. The next two years will test whether Spain can become a European hub of advisory and technical exports. If it succeeds, the headlines will move from “Spain grows fast” to “Spain reinvented its growth.”