File photo: Newly appointed Spain's Economy Minister Carlos Cuerpo swears on the constitution in front of Spain's King Felipe VI during a ceremony at la Zarzuela Palace in Madrid, on December 29, 2023. (Photo by Andres Ballesteros / POOL / AFP)
Madrid: Spain's leftist government on Tuesday slightly raised its 2025 economic growth forecast despite global uncertainty fuelled by trade tensions.
Economy Minister Carlos Cuerpo said the government now expects gross domestic product (GDP) to expand by 2.7 percent this year, up from the 2.6 percent previously forecast.
"The Spanish economy continues to show clear signs of strength in both the short and medium term, and we keep accumulating positive economic news day by day," he told a news conference, describing it as a "prudent forecast".
Cuerpo said growth in the eurozone's fourth-largest economy is being driven by business investment and household spending, as well as a booming tourism sector.
He emphasised that the impact of US-EU trade tensions is relatively limited in Spain, unlike in many other European countries.
A US-EU trade deal agreed in July sets a baseline tariff of 15 percent on most exports from the bloc to the United States.
However, the Spanish government estimates that only around five percent of Spanish exports are destined for the United States.
Spain's economy grew 3.2 percent in 2024, compared with the European Union average of one percent, making it one of the world's fastest-growing advanced economies.
The country has maintained momentum this year, with GDP rising 0.6 percent in the first quarter and 0.7 percent in the second, marking eight consecutive quarters of growth at or above 0.6 percent.
The Bank of Spain also raised its 2025 growth forecast to 2.6 percent, up from 2.4 percent, citing stronger-than-expected performance in the second quarter.
"The Spanish economy continues to show a remarkable capacity for resilience in the current international context," the bank said in its latest economic projections.
It added, however, that "a potential deterioration in external conditions or a more adverse impact from that uncertainty cannot be ruled out."
The bank also raised its inflation forecast for 2025 to 2.5 percent, up from 2.4 percent in its previous projection.
