Spain and Portugal grew by 0.8% in Q4 2025, twice the eurozone average of 0.3%, leading to annual growth of 2.8% and 1.9% respectively, driven by domestic demand, investment, and trade improvements.

In Q4 2025, Spain's economy grew by 0.8%, the strongest quarterly expansion in a year and above forecasts, driven by domestic consumption (+1.0%), investments (+1.7%), and construction (+2.1%), leading to an annual growth of 2.8%, significantly higher than the eurozone average of 1.5%. Portugal also expanded by 0.8% in the same quarter, matching its previous quarter and surpassing expectations, with its 2025 annual growth at 1.9%, supported mainly by improved trade balance due to a sharp drop in imports, particularly petroleum products. Meanwhile, the eurozone economy grew by 0.3% in Q4 2025 with an annual growth of 1.5%, and the labor market showed improvement with eurozone unemployment at its lowest level since 2008, 6.2% as of December 2025. Spain and Portugal’s growth outpaces major peers like Germany and France, highlighting strong Iberian economic performance amid mixed eurozone results.