IMF ups Spain's 2025 GDP growth projection to 2.5%, warns of trade risks

MADRID, April 10 (Reuters) - The International Monetary Fund revised on Thursday its forecast for Spain's economic growth this year to 2.5% from 2.3%, expecting it to remain significantly above the euro zone average in the near term, before slowing gradually.

It warned, however, of downside risks to the forecast, which is now at the same level as the government's and Bank of Spain's predictions, from a potential further escalation of the global trade war, and from domestic political fragmentation.

Spain's economy has outpaced its European peers since the inflation and energy crisis unleashed by Russia's invasion of Ukraine in 2022. That growth was driven by strong exports of services and new jobs, the IMF said in a report.

However, it is expected to gradually slow down as those drivers normalise and demographic aging intensifies. Its growth projection for 2026 remained unchanged at 1.8% and the medium-term potential is seen at around 1.7%.

"The Spanish economy is in a strong position and we expect it to remain robust in the near future," the IMF's Mission Chief for Spain, Romain Duval, told reporters.