The Spanish economy accelerates growth in the fourth quarter while prices fall in January

BarcelonaThe Spanish economy accelerated its growth rate during the last three months of 2025 and almost doubled the expected growth rate in the eurozone, according to preliminary data released this Friday by the National Statistics Institute (INE). This placed Spain among the leading countries in the European Union in terms of growth for another quarter. Meanwhile, the cost of living for families moderated in January after three consecutive months of price increases. Thus, Spain's gross domestic product (GDP, the indicator that measures economic activity) increased by 0.8% in the last three quarters of last year compared to the third quarter, an increase of two-tenths of a percentage point. compared to the previous three months and the highest rate of the entire year. Compared to a year ago, growth was 2.6%, one-tenth of a percentage point less than that recorded in the summer.

The fact that the INE (National Statistics Institute) has already published GDP growth data for all quarters of 2025 also allows us to calculate the average for last year. According to the statistical institute, the Spanish economy closed 2025 with total growth of 2.8%, seven-tenths of a percentage point lower than the variation recorded in 2024, but three-tenths of a percentage point higher than that of 2023, the first year without the effects of the lockdowns caused by the pandemic.

In the fourth quarter, the positive evolution of economic activity came mainly from the growth in household consumption, which increased by 1% compared to the third quarter and by 3.3% year-on-year. This is typical in the last months of the year, coinciding with the Christmas season, when retail and restaurants experience their peak sales. Public administration spending increased slightly by 0.1%, but remained 1.7% above levels a year earlier.

Aside from consumption, investment also stands out, maintaining strong growth rates. In the last three months of the year, it increased by 1.7% quarter-on-quarter and 6.5% annually, high figures that are good news for the Spanish economy, since high investment usually leads to productivity increases, one of the areas where growth in Spain (and also in the Catalan economy) has been lacking for decades.

Spain leads growth in the EU

Economy Minister Carlos Cuerpo described Spanish growth as "solid" and touted the "two very good pieces of news": falling inflation and rising GDP. "This year-end acceleration is very positive, as it lays the foundation for solid growth in 2026," Cuerpo said in a message to the media. He also noted that Spain remains one of the fastest-growing EU member states, a trend that has been confirmed with each new data release for more than two years: "We closed the year leading among advanced economies and with growth around double that of the eurozone," he stated. In fact, this very Friday, Eurostat, the EU's statistical agency, published figures showing that average growth in the eurozone—comprising the 20 countries that share the common currency—during 2025 was 1.5%, 1.3 percentage points below the Spanish average. Across the 27 EU countries, GDP growth was 1.6%.

Prices falling

Regarding the cost of living, this Friday the INE (National Statistics Institute) also published the preliminary data for the Consumer Price Index (CPI, the indicator that measures the evolution of the cost of living for citizens) for Spain this January. Thus, the prices of goods and services that families regularly consume have fallen by 0.4% this month, so compared to a year ago, the cost of living is 2.4% higher (five tenths of a percentage point lower than last year). the rate of the previous monthThe fall in fuel prices and the moderation of electricity prices explain the downward trend in prices, according to the statistical agency. Furthermore, core inflation, which excludes more volatile items such as energy and fresh food, closed the month with a year-on-year increase of 2.6%, thus returning to a position above the overall CPI rate, something that had not occurred since May 2015.