Publications

Public deficit is expected to decline to 2.6% of GDP in 2025 and 2.2% in 2026, driven by the cyclical improvement in activity, the lower impact of DANA-related expenses, and the normalization of tax rates. Reaching 2026 forecast will be require new measures of around 0.4 percentage points of GDP to comply with fiscal rules.

In 2025, the GDP of the Valencian Community could grow by 3.6% and is expected to increase by 2.9% in 2026, leading growth in both years. Looking ahead, economic activity will be marked by high uncertainty surrounding economic and tariff policy and the slow recovery in Europe.

In October, Social Security affiliation increased by 141,900 people and unemployment rose by 22,100. After seasonal adjustment (SA), it is estimated that the number of contributors rose by 57,000 and the number of unemployed fell by 13,000. The temporary employment rate fell marginally to 13.6% SA.

The real estate market in Spain continues to be affected by a lack of supply. The shortage of labor, lengthy land development processes, and regulatory uncertainty, among other factors, are reducing the sector’s profitability and, therefore, limiting investment. As a result, prices continue to rise sharply.

In the third quarter of 2025, the economy grew by 0.6% compared to the previous quarter. This growth was due to domestic demand, which managed to offset the decline in external demand. During this period, there was a significant increase in employment and a decrease in productivity.

Upward revisions in growth forecasts for the Spanish economy have multiplied recently. The feared slowdown that was expected has not occurred.

Adjusted for seasonality (SA), employment grew by 0.4% q/q in the third quarter, slightly less than in the previous one. Hours worked increased (0.7% q/q), while both temporary employment (15.1% SA) and unemployment rates (10.5% SA) continued to decline.