Spain | Basque Country Economic Outlook 2025

Summary

In 2024, the GDP of the Basque Country could have grown by 2.4%, and is expected to increase by 2.3% in 2025 and 1.4% in 2026. Going forward, the evolution of activity will be marked by high economic and tariff policy uncertainty and the slow recovery in Europe.

Key points

• Key points:
• The GDP of the Basque Country is showing a solid advance, above the rest of the Eurozone. Employment is increasing in urban areas, with greater dynamism in Bilbao. This is consistent with a growth model based on the progress of services, both public and private.
• Factors supporting growth will include the fall in oil and gas prices; the more expansionary tone of economic policy in Europe; and a greater capacity for growth in the services sector (due to immigration and increases in hourly productivity).
• Increased tariffs and uncertainty will affect trade flows and investment, which will have a significant impact on production in the Basque Country.
• Bottlenecks are perceived as the lack of sensitivity shown by private investment to the recovery; the high level of household savings, or the shortage of affordable housing.
• By the end of 2026, GDP per capita could be 8.1pp above 2019 levels (Spain 4.5pp). If these forecasts are met, the unemployment rate could be reduced to 7.4% on average in 2026 and 26,400 new jobs could be created in the 2025 2026 biennium.

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