Spain | Canary Islands Economic Outlook 2026

Summary

The Canary Islands maintain solid growth but face a slowdown due to tourism weakness. Consumption and employment are supporting economic activity, with challenges in housing, productivity, and energy.

Key points

• Key points:
• GDP grew strongly (3.4% in 2025) and will moderate to 2.5% in 2026 and 2.0% in 2027. The economy continues to grow above the historical average, although it is losing momentum after the strong post-pandemic rebound.
• Weakness in tourism: a drop in foreign spending and less dynamism in overnight stays. The start of 2026 shows signs of exhaustion in the sector, with less momentum compared to other domestic destinations.
• Greater weight of domestic demand: resident consumption and wages are supporting growth. Improved real income and more favorable financial conditions are boosting spending by Canary Island households.
• Employment continues to grow, driven by immigration, but with risks of labor shortages. Some sectors are beginning to show difficulties in filling vacancies, which could limit future growth.
• Structural bottlenecks persist: insufficient housing, low productivity, and a need for investment in energy. The housing shortage and energy constraints can affect well-being and the attraction of human capital.

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