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Social Security affiliation increased by 211,500 people and unemployment dropped by 22,900. On a seasonally adjusted (SA) basis, job creation is estimated to have accelerated to 76,000 contributors, while the number of unemployed fell by 17,400. For 1Q26, employment grew 0.6% q/q (SA) and unemployment contracted by 1.8%.

The Spanish economy is expected to grow by around 2.4% annually in 2026 and 2027, although with a heterogeneous regional landscape. Growth will be led by tourism- and service-oriented areas this year, while industrial regions could recover in 2027 thanks to stronger European demand.

Economic activity grew again in 4Q25 (0.8% q/q), driven by domestic demand and despite the drag from net external demand. GDP growth was supported by an increase in hours worked, as productivity per hour fell. Overall, GDP grew by 2.8% in 2025.

Economic activity relies more on domestic demand and services, and with greater external risks, leading to growing divergences between regions.

Housing demand in Spain will remain solid driven by employment, wages, and immigration. However, the shortage of new supply will limit sales and maintain strong upward pressure on prices. Furthermore, the profitability of the construction sector remains low compared to Europe.

GDP is estimated to have grown by 2.8% in 2025, and the expansion is expected to continue, with growth of 2.4% in both 2026 and 2027. The outlook remains favourable, although structural challenges persist in a more uncertain international environment than three months ago.

This Working Paper proposes a set of quantitative indicators of territorial equity to assess reforms to the regional financing system, comparing the current model with the Government’s recent proposal and several variations aimed at reducing arbitrariness.