Spain | The challenges of the new term: productivity and investment

The Spanish economy begins the September rentrée with an employment level that is reaching historic highs and an economic growth forecast for 2026 of around 2.5%, which significantly exceeds that of the eurozone. Domestic demand, the increase in the active population, tourism, and more dynamic non-tourism services explain much of this differential.

The economy is advancing strongly, but the pattern of growth matters as much as its pace. National Accounts data show that, since the fourth quarter of 2019, GDP has increased by 12.1%, while GDP per employed person has barely increased by 0.2% and GDP per hour worked by 2.4%. Per capita income has increased, but less than total production. This gap reveals that the increase in employment and population has not been accompanied with the necessary intensity by an increase in value added per worker.

Productivity is, ultimately, the variable that allows for a sustained increase in real wages, the financing of better public services, and addressing aging without placing the entire adjustment burden on social security contributions and taxes. Creating jobs is a necessary condition, but not a sufficient one. When productivity stagnates, growth becomes more dependent on employment, tourism, and consumption—valuable engines, but with limited potential if they are not accompanied by higher value added.

The second cause for concern is investment. In expansionary cycles, investment usually anticipates future growth by incorporating organizational and physical capital improvements, as well as new technologies and knowledge. However, after the pandemic, investment has had a weak and irregular performance. It is especially relevant that private investment has not gained greater dynamism even as financing conditions have improved and companies have healthier balance sheets.

Next Generation funds have contributed to sustaining public investment. But now that their execution period has ended, it is necessary to ask what new investment will take their place and in which sectors. The challenge is not only to execute the remaining resources, but to manage to increase productive capacity and mobilize profitable business projects. Otherwise, the boost will be transitory and the opportunity cost considerable.

The previous diagnosis is completed by three constraints on growth. The first is housing. Its supply shortage makes access more expensive, reduces labor mobility, and makes it difficult to attract talent where it is most productive. The second is fiscal policy. With public debt at close to 101.5% of GDP and accounts prorogued since 2023, it is more difficult to reallocate spending toward housing, infrastructure, education, innovation, or defense, and to improve their efficiency. The third is the external environment: energy inflation, trade tensions, and geopolitical uncertainties place a burden on disposable income and raise business costs.

Spain has advantages that should be leveraged: a diversified external economy, competitive services, greater capacity to generate renewable energy, and a growing active population. But none of these alone guarantees convergence in per capita income with the most advanced European economies. The priority for the new academic year is not only to maintain solid growth that exceeds the European average, but to ensure that every hour worked generates more value. This requires facilitating investment and business growth, reducing administrative burdens and regulatory and economic policy uncertainties, increasing tax and public spending efficiency, strengthening competition, improving human capital and continuous training, accelerating technological adoption and artificial intelligence, and providing stability to investment decisions. It also requires an efficient fiscal policy that allows for prioritizing public spending through periodic evaluations.

The summer break usually offers the illusion of a restart, but the reality is that the new academic year begins with pending issues and challenges very similar to those of previous years. September offers a new opportunity to move from an expansion supported by employment growth toward growth sustained by greater investment and productivity growth. Without that transition, it will be more difficult to maintain the current pace of growth and translate it fully into improvements in well-being.

Press article. Published in Expansión on September 4, 2026.