Portugal & Spain

Owing to maintenance work at most copper foundries in Portugal and Spain, demand has remained low. EU export restrictions on electric motors, which came into effect on January 1, have led to small price reductions for these items in local markets. The aluminium market remains stable but exporters are awaiting clarity on trade negotiations between the EU and the USA regarding potential tariffs on imports from Europe. Secondary aluminium is stronger in Asia than in Europe owing to slow demand for secondary ingots.

Preliminary data indicate steady economic activity in Portugal, supported by a robust tourism performance with international arrivals in early January 2025 showing a 3.1% increase over the same period in 2024. Additional consumer spending during the holiday season exceeded expectations. Meanwhile, new infrastructure projects announced for 2025 are expected to boost employment, particularly in the construction and renewable energy sectors. The unemployment rate was 6.6-6.7% through the end of 2024.

Portugal’s public debt was gradually decreasing over the latter months of last year and this trend is expected to continue in 2025. Maintained primary balance surpluses and favourable growth-interest rate differentials are forecast to drive the ratio down from 95.7% in 2024 to 90.5% in 2026.

Spain’s growth rate for 2024 was 3.1% and the country entered 2025 with a strong economic outlook. Early indicators for January 2025 suggest continued momentum, driven by exports and domestic consumption. Growth is projected at 2.3% for 2025 although this could be tempered by a possible increase in US tariffs. The public debt to GDP ratio in Spain fell to 104.3% in the third quarter of 2024. Continued fiscal discipline and economic growth are expected to reduce this ratio even further throughout 2025.

Recovery efforts following the devastating floods in late 2024 are ongoing. Government programmes have provided a temporary boost to construction activity.

Local governments in major tourism destinations are implementing stricter regulations to address overcrowding and water usage.

Both Portugal and Spain are poised for stable economic growth in 2025, with tourism remaining a key driver. Meanwhile, adjustment to new regulations on exports and potential international trade tensions will play a critical role in shaping market dynamics.