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Date Published: 23/04/2025

Spain is the only large economy that will dodge the effects of the US global trade war

The IMF has predicted that Spain will defy the global slowdown with strong economic growth in 2025

Spain is poised to buck the global trend of economic deceleration caused by the ongoing trade war, according to the International Monetary Fund (IMF). While much of the world grapples with the economic fallout of rising tariffs, Spain is emerging as a rare success story among major economies.

In its latest World Economic Outlook, the IMF has revised global growth estimates for 2025 downward by half a percentage point, settling at 2.8%. This cut reflects the adverse impact of protectionist measures introduced primarily by the United States under Donald Trump’s leadership, which have disrupted global trade flows and dampened economic confidence.

The United States, China and Mexico are the most affected, with growth forecasts reduced by 0.9, 0.6 and 0.3 percentage points respectively.

In contrast, Spain stands out with a revised GDP growth forecast of 2.5% for 2025, two tenths of a percentage point higher than previously predicted in January.

The IMF has also maintained its 2026 forecast for Spain at 1.8%. This positive outlook follows the country’s unexpectedly strong performance in 2024, when the economy expanded by 3.2%. The IMF attributes this momentum partly to reconstruction activities following severe flooding linked to the DANA weather phenomenon.

Also of interest: How Spain’s unique migration policy is fuelling economic growth

Spain’s resilience is notable not only in the context of the trade war but also when compared with its European peers. The eurozone as a whole is expected to see a modest slowdown, with growth forecast at just 0.8% in 2025 and 1.2% in 2026, both figures two tenths of a percentage point lower than earlier estimates.

Russia also makes a modest gain in the IMF’s revised projections, with a slight increase to 1.4% growth in 2025, although the 2026 forecast remains steady at 1.2%.

The IMF warns that the continuation of the trade conflict and growing uncertainty around trade policy could weigh heavily on medium- and long-term growth prospects. It also highlights that reduced policy flexibility in many countries may leave them more vulnerable to future economic shocks.

In a call for renewed international cooperation, the report urges countries to promote a stable and predictable trading environment. IMF chief economist Pierre-Olivier Gourinchas emphasised that tariffs harm not just the targeted economies but also those that impose them, by diverting resources to less efficient sectors and ultimately pushing up prices while lowering overall productivity.

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