The International Monetary Fund (IMF) has improved the growth outlook for the Spanish economy despite the uncertainty and the slowdown in global economic activity caused by the trade war initiated by the United States. The organization predicts that while a worldwide economic slowdown is on the horizon, particularly affecting the United States, Spain's economy will continue to thrive, showing resilience in the face of external pressures.
According to the latest IMF report, the eurozone economy is projected to grow by 0.8% in 2025 and 1.2% in 2026. This modest growth is attributed to rising uncertainty and tariffs, which have become key causes of the sluggish economic performance across Europe. However, the report highlights a potential increase in European household consumption driven by "real wage growth" and increased public spending in Germany, the largest economy on the continent. Recent amendments to Germany's Constitution have removed limits on public deficits, allowing for greater investment in public programs.
In a notable update, the IMF has raised its forecast for Spain’s economic growth by 0.2 percentage points compared to its January report, now predicting a 2.5% growth rate for 2025. The IMF report states, "Spain's inertia contrasts with the slowdown in other countries," underscoring the robust performance of the Spanish economy, which has outpaced its European neighbors.
Spain's economic success can be partly attributed to its foreign sector, which played a pivotal role in the country's GDP growth of 3.2% in 2024, defying the euro area’s average growth of just 0.7%. The growth was significantly bolstered by international trade in services, leading to a substantial current account surplus. However, exports of goods grew minimally, at just 0.1%, as demand from key European economies weakened. Notably, exports to France and Germany fell by 4% and 1.1%, respectively, while Belgium, despite only accounting for 3% of Spanish exports, contributed significantly to the decline with an 18.1% contraction.
Despite these challenges, Spain has successfully diversified its export markets. While sales to the EU and the US have declined, Spain has increased its trade with countries in Eastern Europe, ASEAN nations, Latin America, and Oceania. Exports to ASEAN countries surged by 13.9%, while trade with Latin America and the Caribbean rose by 5.8%. Trade with Africa also intensified, particularly exports to Morocco and Algeria.
The IMF's report indicates that the tariffs imposed by US President Donald Trump are expected to negatively impact the US economy, with growth projections revised down to 1.8% for 2025—one percentage point lower than the previous year and 0.9 points below earlier forecasts. The report notes that the downward revision stems from increased policy uncertainty, trade tensions, and a weaker demand outlook, particularly due to slower-than-expected consumer spending.
Looking ahead, the IMF predicts that the US economy will grow by 1.7% in 2026 under conditions of "subdued private consumption." This forecast reflects a broader trend of reduced growth expectations across advanced economies, including Japan, Canada, and the United Kingdom, all of which have been adversely affected by the ongoing trade war.
In emerging markets, the IMF has also lowered its growth forecast for China from 4.6% to 4% due to the impact of recently implemented tariffs. The outlook for 2026 has similarly declined from 4.5% to 4%. In contrast, India is expected to experience a more stable economic trajectory compared to China, as the IMF anticipates a relatively steady evolution of economic activity in the South Asian nation.
On the stock market front, the trade war has led to notable fluctuations. After a significant downturn on Easter Monday, US stock markets rebounded on April 22, 2025. By 5 p.m. ET, the Dow Jones had gained 2.12%, the S&P 500 increased by 2.13%, and the Nasdaq rose by 2.47%. This rebound followed pressure from President Trump on Federal Reserve Chairman Jerome Powell, reflecting the volatile nature of financial markets amid ongoing trade disputes.
As Spain navigates these turbulent economic waters, its ability to adapt and diversify its trade relationships will be crucial. The country has shown a remarkable capacity to seek new markets, particularly in response to the challenges posed by its traditional trading partners. The growth in the number of companies exporting regularly has also been promising, with a 4.8% increase in exporters, bringing the total to 45,931. These firms accounted for 95.9% of total exports valued at €368.65 billion, an increase of 3% from the previous year.
In summary, while the global economy faces significant challenges from trade tensions and policy uncertainties, Spain's economic outlook remains bright. With a projected growth rate of 2.5%, the country stands out as a beacon of resilience within the European Union. As Spain continues to adapt its trade strategies and explore new markets, its economic dynamism will be essential in weathering the global storm.
