Spain has taken a major step towards fully restoring economic confidence. For the first time since November 2009, the risk premium—a key indicator of economic health—has fallen below the psychologically important threshold of 50 basis points. As of November 12, the yield spread between ten-year Spanish and German government bonds narrowed to 49.7 points, with Spanish bonds yielding 3.138%. This milestone marks a definitive break from the dark days of the sovereign debt crisis, when in the summer of 2012 the risk premium soared above 600 points and the country teetered on the brink of international bailout.
The steady reduction in investor risk is no coincidence. This trend, which began back in 2022, is underpinned by the dynamic growth of the national economy. In recent weeks, positive momentum has been further strengthened by revised forecasts from leading global financial institutions. They have upgraded their outlook for Spain’s GDP growth, both for this year and the next. According to updated projections, the Spanish economy is expected to grow by 2.9% in 2025—four-tenths of a point higher than previous estimates—and by 2% in 2026, which also represents an improvement.
Despite a slight slowdown compared to 2024, when growth reached 3.5%, Spain remains a leader among the world’s major developed economies. Next year, its economy is projected to be outpaced only by the United States (2.1%), but will still grow nearly twice as fast as the eurozone average (1.1%). Notably, international forecasts have been even more optimistic than the government’s own projections; in September, officials expected 2.7% growth this year and 2.2% next year.
Major ratings agencies have also affirmed confidence in the Spanish economy. Following S&P Global Rating, which assigned Spanish debt an ‘A+’ rating, both Moody’s (raising to ‘A3’) and Fitch (to ‘A’) upgraded their assessments. These moves sent a strong signal to the markets and helped reinforce the downward trend in Spain’s risk premium, which was still at 60 basis points as recently as early September.
Spain’s situation looks particularly favorable compared to its neighbors. Rising yields on German bonds, prompted by Berlin’s plans to boost defense and infrastructure spending, have automatically narrowed the spread with Spanish securities. Meanwhile, political instability in France and doubts over its budget discipline have sent Paris’s risk premium soaring to 73.3 points. Yields on Italian and Greek bonds also remain higher than Spain’s, making Spain a ‘safe haven’ for investors in Southern Europe.
In light of these achievements, the government has already moved on to long-term planning. Next week, the Council for Fiscal and Budgetary Policy will convene, where central authorities will discuss financial stability targets for drafting the 2026 national budget with representatives from the autonomous communities.
