Spain | Productivity performance and its causes

Summary

The observatory analyzes the behavior of GDP and productivity per full-time equivalent employee in Spain up to the second quarter of 2025. The Spanish economy completed its post-pandemic recovery in that quarter, with GDP per working-age person standing 0.3 percentage points above its trend.

Key points

• Key points:
• Recent growth is supported by demand and credit factors, which in 2Q2025 explain 1.8 percentage points of the year-on-year increase in GDP per FTE, while supply shocks subtract 1.1 percentage points.
• The labor market shows high tension, with the unemployment rate at 10.6% and the job vacancy rate stabilizing around 0.6%. The vacancy-to-unemployment ratio (5.6%) is clearly above its pre-pandemic level (3.4%).
• Productivity per hour worked has increased by only 3% since 2019, while productivity per employee and per full-time equivalent (FTE) remains stagnant or below pre-pandemic levels, reflecting persistent structural weaknesses.
• Since 2020, productivity growth per FTE has been 28 points below its historical trend, due to negative supply and demand shocks. Notably, adverse effects from foreign trade and monetary policy have been partially offset by bank credit.

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