REGIONAL REPORT
Image: Jorge Fernandez Salas / Unsplash. despite the tariffs. We expect to see stronger-than-average performance in high-value-added sectors. In contrast, branches of industry with a high exposure to international competition and cost pressures are expected to record more modest growth,” it continued.
It cautioned that manufacturing is the sector of the Spanish economy that is most exposed to the tariffs imposed by the U. S.( both through the direct channel— due to its high export-intensity— and through indirect channels). The uncertainty stemming from swings in U. S. trade policy could adversely affect investment, posing a risk to what is a capital-intensive sector.
“ Although the competitive advantage derived from energy prices is expected to persist, the headwinds associated with international trade policy suggest that we will see a slowdown in the sector’ s growth rate, placing it slightly above 2.0 % in 2025 and 2026,” said Caixa Bank Research.
The BIEMH International Machine Tool Exhibition will be held from 2-6 March 2026 at Bilbao Exhibition Centre in Spain. Over 1,000 exhibiting companies from 26 countries have already confirmed their participation in an event that will showcase innovations in machine tools, automation, robotics and digitalisation, as well as components, accessories, tools, metrology and services for production. BIEMH 2024 brought together more than 37,500 visitors from 67 countries. BIEMH 2026 is organised by AFM, Machine Tool Manufacturers; AIMHE, Machine Tools Importers and Bilbao Exhibition Centre, with the SPRI-Basque Government as the Institutional Partner.
IMF forecast for Spain
In June 2025, the International Monetary Fund concluded its‘ 2025 Article IV Consultation’ with Spain.
“ The Spanish economy has been
A press bolster from Fagor Arrasate. performing strongly, supported by services exports and labour force growth. Growth is expected to remain significantly above the euro area average in the near term, before slowing gradually as its recent drivers normalise and demographic ageing intensifies. Most risks are to the downside, including from a further escalation of trade measures and domestic political fragmentation,” commented the IMF in June 2025.
“ The authorities should seize the growth momentum to more swiftly rebuild fiscal space and reduce sovereign debt risks through a clearer
Madrid in Spain.
BIEMH 2025 in Bilbao. consolidation strategy grounded in well-identified tax increase and spending reduction priorities. Additional measures should also be taken to address fiscal pressures from rising future pension expenditures, and to improve the pension system’ s safeguard clause. Raising productivity is key to boosting income per capita gains, which have been modest since the pandemic. This should be achieved through a new wave of reforms to facilitate firms’‘ scaling-up’ and strengthen innovation,” it added.
With a growth rate of 3.2 per cent in 2024, the IMF confirmed that Spain has been one of the fastest-growing economies in the euro area. Growth has been fuelled by robust services exports and labour force growth, which immigration has boosted.
“ However, because high GDP growth has been accompanied by high employment growth, GDP per capita gains have been more modest. Despite recent progress, Spain still has one of the lowest employment rates in Europe, and a persistent gap in( hourly labour) productivity vis-àvis the euro area and— even more so— the U, S.,” it cautioned.
In June 2025. the IMF projected growth to reach 2.5 per cent in 2025 before slowing to 1.8 per cent in 2026 as export and workingage population gains normalise. Growth was expected to be primarily supported by private domestic demand, including due to a decline in the household saving rate and a pick-up in investment. Inflation was projected to decline further and return close to the ECB’ s target by the end of 2025.
“ The Spanish economy has continued to outperform the euro area but per-capita income gains have been more modest. Two major drivers of Spain’ s strong growth have been, on the supply side, labour force growth, and, on the demand side, services exports. Labour force growth has particularly benefitted from recent migration inflows, which have risen sharply above pre-pandemic levels. Services exports have been fuelled by the strong post-COVID recovery in tourism, but also by improvements in the performance of Spanish exporters in non-tourism services,” commented the IMF.
Spain reduced its per-capita income gap vis-à-vis the highest-income euro area economies by over three percentage points during 2022-24, helped by an acceleration in productivity growth.
“ On the demand side, tourism is expected to expand at a slower
Two major drivers of Spain’ s strong growth have been, on the supply side, labour force growth, and, on the demand side, services exports
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