Spain’s government has increased its 2025 GDP growth projection to 2.6%, up from the earlier estimate of 2.4%, according to the country’s economy minister Carlos Cuerpo.

During interviews with the media, including an appearance on RNE radio on Monday, Cuerpo highlighted that Spain is set to outperform other major eurozone economies this year despite global geopolitical challenges.

Recent data revealed that Spain's economy grew by a stronger-than-anticipated 3.2% in 2024, Reuters news agency reports.

Cuerpo noted that Spain contributed nearly half of the 20-country eurozone's economic growth in 2024. Unlike Spain's robust performance, France anticipates a 0.9% growth rate this year, while Germany expects a modest 0.3% expansion.

In addition, Spain's manufacturing sector experienced a slowdown at the beginning of 2025, with output and new orders increasing at a much weaker pace compared to December, according to a survey released on Monday.

S&P Global's HCOB Spain Manufacturing Purchasing Managers' Index dropped to 50.9 in January from 53.3 in December, marking the slowest growth since August. 

A reading above 50 indicates expansion, while a figure below that signals contraction.

Export growth was minimal, impacted by weakened sales in key European and Latin American markets.

“Momentum in Spain's manufacturing sector has significantly slowed. Foreign orders broadly stagnated in January, partly due to weakness in major eurozone countries like Germany and France,” said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank.

Furthermore, employment growth in Spain was modest as companies grappled with cost pressures and restructuring initiatives. Input inflation surged to its highest level since last July, driven by rising steel prices and transport costs, prompting firms to raise output prices for the first time in four months.

Despite these hurdles, business confidence in the country held steady, with firms anticipating increased production supported by new commercial activities.