Spain | Regional Economic Outlook. October 2025

Summary

The GDP growth forecast has been revised upward across the board for 2025 and 2026. The revision is due to the resilience of economic activity, especially exports of both goods and services, as well as investment playing a more important role in the recovery than previously thought.

Key points

• Key points:
• In 2025, the Spanish economy will maintain solid growth of 3.0%. Although consumption by non-residents is slowing down, it continues to evolve positively, allowing the island regions to remain among the most dynamic, along with Madrid and Catalonia, which also benefit from the strong performance of non-tourism service exports.
• Greater exposure to the implementation of MRR funds and measures resulting from the storm will favor above-average growth in the Valencian Community, Murcia, Andalusia, and Castile-La Mancha.
• The weak recovery in some industrial sectors will limit growth in much of the north, with the exception of Galicia, Castile and León, and La Rioja, which are performing better.
• In 2026 (Spain, 2.3%), non-resident consumption is expected to moderate, which will particularly affect the regions most dependent on tourism. In contrast, strong domestic demand and increased defense spending will drive growth in the Valencian Community, Galicia, Madrid, Murcia, and Andalusia.
• Significant economic risks persist, stemming from instability in the US, low growth in Europe, and loss of competitiveness, as well as structural factors such as housing and labor shortages, low productivity, and lack of political consensus, which limit growth and the reduction of the public deficit.

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