Spain's investment recovers to pre-COVID levels

Monday 24 March 2025 - 16:10

By: Zahouani Ilham

Spain's investment recovers to pre-COVID levels

In 2024, Spain's total gross investment rose by 2.1% in real terms, reaching €306.7 billion, returning to levels seen before the COVID-19 pandemic, according to a study by the BBVA Foundation and the Institute of Economic Research of Valencia (Ivie). This growth was mainly driven by public investment, which increased by 5.9%, amounting to €34.8 billion, largely supported by European funding from the "Next Generation EU" program.

Private investment, accounting for nearly 90% of the total, grew by 1.7% year-on-year, reaching €271.9 billion. However, it remains below its 2019 level, with a real decrease of 3.5%.

Investment in infrastructure increased by 34.7% since 2019 but is still 17.6% below its 1995 level and 63% below its peak in 2009, representing only 5.3% of the total investment. In 2024, road investments slightly grew by 0.7% to €5.07 billion, after a significant decline between 2010 and 2018 (-56.3%). Rail investments, driven by a post-COVID rebound of 35.7%, increased by 4.3% to €4.32 billion, according to the study.

Urban infrastructure continued to grow with a 9.2% increase, supported by local governments and European funds, while hydraulic investments, experiencing a slight rebound (+2.4% to €2.7 billion), remain significantly lower in the long term (-42% since 1995).

National investment, as a percentage of GDP, stood at 19.3% in 2024, five points lower than in 2019. Nevertheless, the capital stock increased by 1.4% over the year, a "modest but positive" development, as noted by the authors of the study.

In terms of productivity, Spain has a capital underutilization rate higher than the European average, with 23.1% of manufacturing capital unused (compared to 19.5% in the EU) and 12.7% in services (compared to 9.4% in the EU-28), the report concludes.