Business

Spain’s Economy Posts Strong Growth in 2024, Outpacing Eurozone Peers

Published

9 months ago

March 26, 2025

RTX

Spain’s economy expanded by 3.2% in 2024, making it one of the fastest-growing economies in the eurozone. Strong domestic demand, a thriving tourism sector, and the continued rollout of European recovery funds drove the country’s robust performance, outpacing major economies like Germany, France, and Italy. Economists expect Spain’s economic momentum to carry into 2025, maintaining its position as a “bright spot” in Europe.

Strong Economic Expansion

Spain’s GDP grew by 0.8% in the fourth quarter of 2024, according to the National Statistics Institute (INE), bringing full-year growth to 3.2%. This figure is more than three times the eurozone’s average growth of 0.9%. Among eurozone nations, only Malta (6%), Croatia (3.8%), and Cyprus (3.4%) recorded stronger growth.

In contrast, Germany’s economy shrank by 0.2%, while France and Italy registered modest growth of 1.1% and 0.7%, respectively.

The Spanish economy benefited from a mix of structural improvements and favorable economic conditions. Key growth drivers included resilient household spending, a booming tourism industry, and effective use of EU recovery funds.

Drivers of Growth

Domestic demand played a crucial role in Spain’s expansion, contributing 3.6 percentage points to overall GDP growth. Household consumption rose by 1%, while investment surged by 2.9%. Public expenditure also increased by 0.3%. However, external demand remained weak, as imports (+1.4%) outpaced sluggish exports (+0.1%), creating a slight drag on overall growth.

Across industries, most sectors saw gains. The construction sector grew by 2.7%, services by 1.0%, and manufacturing by 0.5%. Only the primary sector, which includes agriculture and fishing, experienced a decline of 0.7%.

Tourism Fuels Economic Strength

Spain’s tourism sector continued its strong recovery, welcoming an estimated 94 million international visitors in 2024—a 10% increase from the previous year. Economist Judit Montoriol Garriga from CaixaBank Research noted that the sector showed “no signs of cyclical exhaustion,” with tourism-related GDP projected to rise by 3.6% in 2025. The industry’s growing contribution to Spain’s economy is expected to reach 13.2% of GDP, up from 12.9% in 2024.

The tourism sector’s success has significantly benefited related industries, including retail, hospitality, and transport services.

Outlook for 2025: Continued Growth, but Slower Pace

Spain’s economic growth is expected to moderate in 2025, though it is likely to remain one of the strongest performers in the eurozone. The Organisation for Economic Co-operation and Development (OECD) forecasts a 2.6% GDP increase for Spain, compared to projected growth of just 0.4% in Germany, 0.8% in France, and 0.7% in Italy.

Montoriol Garriga anticipates 2.5% growth in 2025, driven by factors such as falling interest rates, higher household purchasing power, and continued EU recovery fund disbursements. The latest outlook from BBVA also suggests that Spain and Portugal will continue to outperform core eurozone economies.

Inflation and Economic Stability

Inflation remains relatively stable in Spain. Harmonized consumer prices rose by 2.9% year-on-year in February 2025, with core inflation—excluding volatile energy and food prices—easing to 2.1%, close to the European Central Bank’s 2% target. However, some economists warn that rising producer prices, which surged 6.6% year-on-year in February, could push consumer prices higher in the coming months.

Recovery Funds Continue to Support Growth

Spain has benefited significantly from the European Union’s NextGenerationEU (NGEU) recovery program. By the end of 2024, the country had allocated €47.6 billion in grants and tenders, representing about 60% of the total grant package. In December 2024, Spain requested an additional €8 billion in grants and €15.9 billion in loans from the European Commission.

According to a Bank of Spain survey, nearly half (45%) of Spanish companies stated they would not have made their investments without NGEU funding, highlighting the program’s role in supporting economic expansion.

Labour Market and Housing Sector

Spain’s labor market remained strong in 2024. The unemployment rate fell to 10.61% in the fourth quarter, marking its lowest level since 2008. Total hours worked increased by 2.8% year-on-year, while full-time equivalent employment grew by 2.3%.

Meanwhile, the housing market continued to show resilience. Home prices rose by 5.8% in 2024 and are expected to increase by 5.9% in 2025. Transaction prices climbed by 8.4% last year, with further growth anticipated.

Spain’s Economic Outlook Remains Positive

Despite expectations of a slowdown from 2024’s rapid pace, Spain’s economy is likely to remain one of the eurozone’s strongest performers in the coming years. The OECD projects 2.1% growth for Spain in 2026—nearly double the forecasted growth rates for Germany, France, and Italy.

With a robust domestic economy, a thriving tourism sector, and continued investment from EU recovery funds, Spain’s post-pandemic economic expansion appears set to continue well into the future.

Business

US Allows Nvidia to Sell H200 Chips to Approved Chinese Customers With 25% Surcharge

Published

1 day ago

December 9, 2025

Web Reporter

The United States has granted Nvidia permission to sell its H200 semiconductor chips to selected customers in China, provided the company pays a 25% surcharge to the US government. President Donald Trump announced the decision on Monday, marking a shift in Washington’s export policy after months of lobbying from Nvidia chief executive Jensen Huang.

The approval, which will also extend to other American chipmakers such as Intel and AMD, follows earlier restrictions imposed over concerns that advanced US-made chips could strengthen China’s military and cyber capabilities. The agreement does not cover Nvidia’s more powerful Blackwell chips or the upcoming Rubin series, which remain prohibited for export.

Trump said in a post on Truth Social that he had personally informed Chinese President Xi Jinping of the decision and that the move would maintain strong national security protections. He described Xi’s response as “positive”.

The H200 chip is used in a wide range of high-performance computing applications, from medical technology to artificial intelligence systems. While not as powerful as the Blackwell line—considered the current benchmark in AI processing—the H200 remains significantly more advanced than chips produced by Chinese manufacturers.

Restrictions on China’s access to American semiconductors have been a central component of Washington’s technology policy. In April, the US barred sales of Nvidia’s H20 chip to China on national security grounds, even though the chip had been specifically designed to comply with existing export rules. That decision was later softened in July after Nvidia agreed to return 15% of its China revenue to the US government. AMD accepted a similar arrangement.

Critics of the export controls argue that limiting access to foreign technology pushes China to accelerate its domestic semiconductor development. Beijing has already discouraged state-linked firms from buying Nvidia products, warning that reliance on US hardware could leave companies vulnerable to abrupt policy changes.

Nvidia said in a statement that allowing the sale of H200 chips to vetted commercial customers “strikes a thoughtful balance that is great for America”, adding that the arrangement would support well-paid US jobs and strengthen domestic production.

Despite the added safeguards, several Democratic senators have opposed the approval. They warned that giving China access to more capable chips could assist its military and expand its ability to carry out cyberattacks on American infrastructure. Their concerns were amplified by a recent admission from Chinese AI firm DeepSeek, which said its biggest competitive obstacle was the lack of access to cutting-edge semiconductors designed in the United States.

The decision opens one of Nvidia’s most important markets at a time when demand for advanced chips continues to surge globally, setting another stage in the ongoing technological and geopolitical rivalry between Washington and Beijing.

Business

Gold Looks to 2026 After a Record-Breaking Year Marked by Geopolitical Tension and Strong Central Bank Demand

Published

1 day ago

December 9, 2025

Web Reporter

Gold enters 2026 after one of the strongest years in its modern history, rising more than 60% in 2025 and setting over 50 record highs. The surge placed the metal ahead of all major asset classes and delivered its best performance since 1979. Now, investors are assessing whether gold can extend its momentum over the next year or whether the market is nearing a turning point.

Analysts say the 2025 rally was the product of several overlapping global forces. Persistent geopolitical risks, trade uncertainty, a softening US dollar, and expectations of lower interest rates all helped drive demand. Central banks also played a decisive role by continuing to absorb large volumes of gold, keeping official-sector buying well above pre-pandemic levels.

Data from the World Gold Council (WGC) highlights how these factors contributed to the metal’s rise. Geopolitical tensions alone added roughly 12 percentage points to year-to-date performance, while a weaker dollar and modestly lower rates provided another 10 points. Economic expansion and investor positioning also offered meaningful support.

Looking ahead, the WGC expects many of the same pressures to influence the market in 2026. But it cautions that gold begins the year from a very different starting point. Prices have already factored in broad expectations of steady global growth, moderate rate cuts, and a stable dollar. With real interest rates no longer falling sharply and momentum cooling, the Council describes gold as fairly valued at current levels.

In its central outlook, the WGC projects gold trading in a narrow band next year, with returns likely ranging between a 5% decline and a 5% gain. The group notes that investor sentiment is balanced rather than defensive, reducing the likelihood of outsized moves unless economic conditions shift significantly.

Three alternative scenarios could force a deviation from this baseline. In a mild economic slowdown marked by extra US rate cuts, gold could rise 5% to 15% as investors position more cautiously. A deeper recession could push gains even higher, with the WGC estimating a potential 15% to 30% jump driven by aggressive policy easing and renewed safe-haven flows. On the other hand, if pro-growth policies from the Trump administration lift yields and strengthen the dollar, gold could fall 5% to 20% as opportunity costs rise.

Despite the WGC’s measured tone, major Wall Street institutions remain bullish. J.P. Morgan Private Bank expects prices to climb to between $5,200 and $5,300 per ounce, while Goldman Sachs forecasts around $4,900. Deutsche Bank and Morgan Stanley also see room for appreciation, though both acknowledge possible volatility in the coming months.

Much of this optimism is tied to ongoing demand from central banks, especially in emerging markets, and the belief that many global investors remain underexposed to gold. Softening real yields and persistent geopolitical uncertainty are also seen as supportive.

At the same time, risks could hinder further gains. A stronger US economy, renewed inflation pressures, or reduced central bank buying could weigh on the market. Rising supply from recycled gold, particularly in India where the metal is widely used as collateral, may also place pressure on prices.

While a repeat of 2025’s dramatic rise appears unlikely, analysts agree that gold enters the new year from a position of strength. Its reputation as a hedge during unpredictable times remains firmly intact, keeping it central to many investors’ long-term strategies.

Business

Goldman Sachs Warns Europe Faces Economic Strain as China’s Export Push Intensifies

Published

3 days ago

December 7, 2025

Web Reporter

China’s strengthening export momentum is emerging as a significant threat to Europe’s economic outlook, with Goldman Sachs cautioning that major EU economies could face notable GDP losses as Beijing doubles down on an export-led recovery strategy. The investment bank has cut its eurozone growth forecasts, warning that Europe is increasingly exposed to rising global trade competition at a time of limited policy flexibility.

Giovanni Pierdomenico, an economist at Goldman Sachs, said the euro area is “particularly exposed” to the impact of increased Chinese goods supply, which risks widening the region’s growing trade deficit with China and undermining its already weakened competitive position. The bank estimates that stronger Chinese export competition will reduce eurozone GDP by about 0.5% by the end of 2029.

Germany is projected to face the heaviest hit, with real GDP expected to be 0.9% lower over the next four years due to pressure from Chinese exports. Italy is forecast to see a 0.6% impact, while France and Spain are each expected to register declines of around 0.4%.

Goldman analysts point to a sharp shift in global market dynamics: in the past five years, eurozone exporters have lost as much as four percentage points of market share to Chinese firms across major global markets. The bank estimates that for every one-dollar increase in Chinese exports, European exports typically fall between twenty and thirty cents, illustrating the scale of substitution taking place. This trend, analysts say, is steadily eroding Europe’s competitive edge.

European policymakers have announced a series of measures aimed at strengthening strategic resilience, including the Critical Raw Materials Act and the AI Continent Action Plan. But Goldman Sachs remains doubtful that these initiatives will be enough to counter China’s export dominance. Analyst Filippo Taddei notes that the EU’s response is constrained by structural vulnerabilities — particularly its heavy reliance on China for key components and raw materials.

Goldman warns that while selective action against certain Chinese products is possible, broader restrictions could disrupt supply chains central to Europe’s industrial activity. At the same time, the bank highlights that many EU programmes intended to shore up competitiveness remain underfunded relative to their ambitions.

Defence is the only sector where Europe has committed substantial financial resources, with the Readiness 2030 programme backed by €150 billion in loans under the Security Action for Europe scheme. Even this effort, however, relies on Chinese supplies of rare earth elements essential for advanced military systems.

The bank concludes that without a more unified and assertive industrial strategy, Europe risks losing further ground in global markets it once dominated. Policymakers now face difficult decisions over how to reinforce Europe’s industrial base while managing its dependence on Chinese inputs — and how long the region can rely on fiscal support and consumer strength to cushion its economy against mounting external pressures.