Spain's economic growth is set to slightly slow down to a still solid rate of between 0.6% and 0.7% in the first quarter of 2025 from the previous three months, when gross domestic product expanded 0.8%, the Bank of Spain said on Tuesday.
The bank attributed the slight slowdown to lower consumer spending and lower domestic tourism than in the fourth quarter, when people traditionally spend and travel more.
In its quarterly outlook update, the central bank raised the full-year growth to 2.7%, slightly above the 2.5% expected three months ago, as private spending will keep the economy rolling.
The Spanish government recently raised its 2025 growth forecast to 2.6%.
The Spanish economy's buoyancy contrasts with the rest of the euro zone's large economies such as France, Germany and Italy, which are all expecting a growth rate below or close to 1%.
The central bank maintained its growth forecast for 2026 and 2027 unchanged at 1.9% and 1.7%, respectively, as it expects in the longer run the labour force increase and the crucial tourism industry to slow down.
The bank said it expects higher energy prices will push EU-harmonised inflation to 2.5% this year, up form a previous forecast of 2.1% three months ago, but lower than the 2.9% inflation rate of 2024.
It maintained its outlook for inflation at 1.7% and at 2.4% for 2026 and 2027, respectively.
