About 12 years ago, Spain was a synonym of economic failure. The government and banks of the country seemed caught in a spiral of death, young people left the country or protested on the lack of opportunities. The houses remained half built, and the airports were abandoned, relics of the explosion of the construction bubble, writes The Economist. Things have changed radically since then. The country's government has received a new impulse from credit rating agencies, Fitch and Moody's, joining S&P recently to revise its evaluations in Spain, according to CNBC. Spain ratings are improved even when savings that can be considered stronger see their retrograde ratings and in the context in which the Spanish economy continues to «beat» the other European economies, the country's government, as well as its central bank, recently reviewing its growth estimates on 2025. Reuters. The Spanish GDP advanced 0.8% in T2 in quarterly terms, faster than previously anticipated. And in annual terms the advance was faster than previous estimates. All the main economic sectors recorded a solid growth. The services sector, which represents more than half of the country's GDP, was driven by the sustained boom of tourism. In the first half of 2025, Spain received a record number of 44.5 million visitors, up 4.7% compared to the similar period of 2024. The economic growth coincided with a decline in unemployment to 10.29% in T2, the lowest level since the beginning of 2008. The euro area, driven by the tourism boom, but also by the solid agriculture industry and growing exports. «Recent productivity increases, moderate increase in wages and relatively low energy prices have external competitiveness and strengthened external private balance sheets,» the Fitch statement issued after improving Spain rating. Moody's specified that its decision reflects an increase in Madrid's economic power due to a more balanced growth model, labor market improvements and a more robust banking sector. Apart from tourism, the Spanish economy is driven by immigration and foreign investments. According to the Editorial board of the Financial Times, a mix of factors is the basis of the economic success of Spain. Tourism recovered after the pandemic. The country's government has spent and spends the grants of the EU Next Generation fund on improving infrastructure, Spain being the second great beneficiary. The cheap renewable energy of ARAS also Direct Foreign Investments. Previous reforms also help. But the biggest engine in Spain is immigration. Since 2022, the country registered on average annual net entries of about 600,000 immigrants, the vast majority of active age. A reserve of the expanding labor force pushed the employment rate at record levels. The growth of the population also gave impulse to consumption expenses. Goldman Sachs analysts show that in Europe, the composition of the service sector activity has changed to subsectors with a higher value per employee, and this trend is especially visible in Spain. The share of high value-added services in Spain GDP is now 3% higher than before pandemic and has increased by 1% more than the rest of the euro area.
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