From Madrid to Barcelona, restaurants and bars are brimming with people, and reservations have become essential for everything from fine dining to high-end hotels.
It’s a glimpse of how Spain has become Europe’s buzziest economy – named the world’s best by the Economist in 2024 – fuelled in part by what analysts have described as the government’s strikingly different approach to migration.
This difference was laid bare late last year when Spain’s prime minister gave a stark warning on migration. But unlike his counterparts in Italy, Germany or France, Pedro Sánchez was intent on rallying the country behind a markedly different approach.
“Spain needs to choose between being an open and prosperous country or a closed-off, poor country,” he told parliament in October. “It’s as simple as that.”
Migration was not only a question of humanity, he said, but – in a country where the birthrate ranked among the lowest in the EU – it was the only realistic means of growing the economy and sustaining the welfare state.
Pedro Sánchez took a radically different approach to migration compared with his western European counterparts. Photograph: Luis Soto/SOPA Images/REX/Shutterstock
Months on, his stance has seemingly been backed by economic data: Spain’s economy expanded by 3.2% last year. This far outpaced Germany’s 0.2% contraction, France’s 1.1% growth and Italy’s 0.5%. The figure was also ahead of Britain, whose total GDP grew by 0.9% last year and the Netherlands’ 0.8% growth.
Crucial to this growth was the movement of people, said Javier Díaz-Giménez, a professor of economics at the IESE Business School. “It’s been done with a lot of tourists and a lot of immigrants.”
A record 94 million tourists visited Spain last year – up 10% on the previous year – creating jobs in hotels, restaurants and other tourist services. High rates of migration have allowed Spain to take advantage, and push unemployment levels to their lowest since 2008, as migrants have plugged the gaps in a labour market where the working-age population is ageing.
Other factors are also at play. Spain’s abundance of wind and solar renewables has helped to keep energy relatively cheap while EU Covid recovery funds bolstered the economy and the socialist-led government ran a deficit to fund initiatives such as raising pensions and public sector hiring. “If you get this combination, it’s hard to beat,” said Díaz-Giménez.
More than 400,000 jobs created in Spain last year were filled by migrants or people with dual nationality. Photograph: Kevin Foy/Alamy
After years of watching the far right’s hardline views on migration become mainstream, analysts were swift to highlight how Spain was different. “One remarkable facet of Spain’s recent performance has been the role of immigration,” economists at JPMorgan noted in a recent research report. “2022 saw the highest net migration in 10 years, at close to three-quarters of a million individuals.”
The result was a working-age population that nearly doubled compared with other countries in western Europe. Of the 468,000 jobs created across Spain last year, roughly 409,000 were filled by migrants or people with dual nationality, many of them from Latin America, but also from across Europe and Africa. “Overall, Bank of Spain analysis suggests immigration contributed over 20% to the near 3% GDP per capita income growth during 2022-2024,” noted JPMorgan.
The Spanish experience comes as countries across Europe wrestle with a seemingly intractable dilemma. As politicians on the far right and the right compete for votes by peddling hostility towards migrants, ageing populations are shrinking the pool of workers who can pay for pensions and support the welfare state.