Spain Economic Outlook. December 2025

Summary

GDP growth will reach 2.9% in 2025 (0.1 pp less than forecast in October), while in 2026 and 2027 the expansion is expected to continue with increases of 2.4% (0.1 pp more than in October) and 2.0%, respectively. The outlook is positive, although significant structural challenges persist.

Key points

• Key points:
• Global growth will be around 3.2% between 2025 and 2027, above previous forecasts but slightly below the average of the past two decades. The boom in AI, fiscal stimulus, lower interest rates, wealth and financial effects, and cheaper energy are boosting demand.
• In Spain, GDP will grow by 2.9% (0.1 pp less than forecast in October) in 2025. Activity is increasingly reliant on domestic demand and job creation, although productivity and real wages are making only limited progress.
• In 2026 and 2027, the expansion is expected to continue with activity increases of 2.4% (0.1 pp more than in October) and 2.0%, respectively. Domestic demand will remain supported by the improvement in household disposable income, lower interest rates, and faster execution of RRF funds.
• The ongoing slowdown stems from the moderation in foreign tourism’s contribution, the challenges still faced by goods exports, and a fiscal policy that will become contractionary from the second half of 2026 onward.
• The outlook is favorable, but major challenges remain: goods exports are not growing, investment is weak, labor shortages coexist with high unemployment, there are questions about the sustainability of migration flows, productivity gains supported by AI must be consolidated, and a demanding fiscal path must be met.

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