Spain | Madrid Economic Outlook 2026

Summary

The Community of Madrid maintains high growth but faces a slowdown with less momentum from services, both in tourism and the rest. Employment and consumption are sustaining economic activity, though challenges remain in the housing and productivity sectors.

Key points

• Key points:
• GDP grew strongly (3.1% in 2025) and will moderate to 2.7% in 2026 and 2.4% in 2027. The economy maintains a dynamism above the average, supported by services, although it loses momentum after the recent strong expansionary cycle.
• Weakness in tourism: foreign spending moderates its advance although overnight stays rebound. The start of 2026 confirms the moderation, with a certain stagnation of domestic tourism.
• Greater reliance on domestic demand, with consumption sustaining growth. Improving wages and financial conditions are driving household spending, partially offsetting the lower contribution from abroad.
• Employment continues to grow strongly, driven by immigration and services. Public and private services, particularly trade and professional activities, lead job creation, although tensions are emerging due to labor shortages.
• Structural bottlenecks persist: housing, energy, and tourism capacity. The housing shortage, tourism capacity limits, and energy investment needs constrain future growth.

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