Spain | How is the execution of the NGEU funds progressing?

As we approach the final stretch of the allocation of funds linked to the Recovery Plan, it is worth looking back and taking stock of the objectives that have been achieved and those that remain to be met. As promised, the volume of resources invested has been significant, as has the number of individuals and businesses that have had access to them. The resources have helped promote a certain degree of convergence among regions and a more sustainable growth model. However, there is a risk of underspending and concentration of resources in large companies, while their phase-out could leave a large gap in investment, and there are no obvious effects on productivity.

The amount of funding injected into the economy has been considerable. By the end of June, contracts and grants financed by Recovery Plan transfers amounting to €62.726 billion had been awarded, representing 78% of the projected investment volume under the Recovery and Resilience Facility (RRF). Regarding loans, practically the entire volume ultimately committed has been rolled out. A very significant portion of these resources (€10.8 billion) has been allocated to endow the España Crece (Spain Grows) fund, a financial instrument whose investment capacity will be gradually deployed over the coming years.

In any case, with barely two months left until the execution deadline for the committed investments concludes, available data suggest that close to €13 billion has yet to materialize. Nevertheless, leading indicators of execution do not show an acceleration of the Plan. Maintaining the pace observed through the end of June would mean leaving around €10 billion unspent.

The distribution of the Plan's beneficiaries has barely changed since the end of 2025. Individuals continue to be the primary recipient group, accounting for 62% of all beneficiaries, followed by micro-enterprises and SMEs, which make up 28%. However, in terms of monetary value, these two groups only account for 5% and 27% of the allocated resources, respectively. In contrast, large corporations, despite representing only 1.5% of beneficiaries, absorb almost a third of the funds.

In terms of regional GDP, regions with lower income levels tend to record a higher investment intensity, suggesting a certain redistributive nature in the allocation of funds. Castile and León, Extremadura, Galicia, and Murcia are among the most benefited, in addition to Aragon and Madrid.

Regarding sustainability, the Recovery Plan reserves nearly 40% of the investments financed by transfers (around €32 billion) for actions related to the green transition. In any case, the landscape has barely changed since the end of 2025. According to estimates by BBVA Research, around €2.2 billion in green investments were awarded during the first half of 2026, reaching a total of €16.365 billion, equivalent to 24% of the expenditure executed under the RRF.

Beyond the execution data, the question is what will happen to the Spanish economy in the absence of these funds and what their transformative capacity has been. Given the magnitude of the resources invested, the end of the program could have a negative short-term impact on GDP. In particular, without these resources, it is estimated that investment in non-residential construction would be 8% lower than currently observed, which points to the fact that the program has partially replaced capital expenditure that would have been made anyway.

Perhaps more important is the effect that the reforms associated with the resources will have. For the time being, productivity per worker shows no improvement, and a large part of the growth is concentrated in service sectors that have not been directly affected by the program. Moving forward, evaluations that allow for a better estimation of their effects and draw lessons from this episode will be key to improving efficiency in the use of public resources.