Spain: 2025 Article IV Consultation-Press Release; and Staff Report

IMF Staff Country Reports, June 6, 2025

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Spanish economy has been performing strongly, supported by services exports and labor force growth.
Growth is expected to remain significantly above the euro area average in the near term, before slowing gradually as its recent drivers normalize and demographic aging intensifies.
Income per capita gains have been modest since the pandemic.

Most risks are to the downside.
Specific downside risks cited:
- further escalation of trade measures
- domestic political fragmentation

Authorities should seize the growth momentum to more swiftly rebuild fiscal space and reduce sovereign debt risks through a clearer consolidation strategy.
Consolidation strategy should be grounded in well identified tax increase and spending reduction priorities.
Additional measures should be taken to address fiscal pressures from rising future pension expenditures.
Improve the pension system’s safeguard clause.

Raising productivity is key to boosting income per capita gains.
Recommended approach: a new wave of reforms to facilitate firms’ scaling-up and strengthen innovation.

Publication title: Spain: 2025 Article IV Consultation-Press Release; and Staff Report
Date: June 6, 2025
Pages: 86
Volume: 2025
Issue: 121
Series: Country Report No. 2025/121
DOI: https://doi.org/10.5089/9798229012782.002
Stock No: 1ESPEA2025001
ISBN: 9798229012782
ISSN: 1934-7685
Subject: Expenditure, External debt, Labor, Labor markets, Public debt
Keywords: article IV consultation discussion, Europe, gap vis-à-vis, Global, headline inflation, IMF staff estimate, Labor markets, productivity-enhancing reform

International Monetary Fund. Spain: 2025 Article IV Consultation-Press Release; and Staff Report (IMF Staff Country Reports 2025, 121).

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