Publications

Spain grew by 2.8% in 2025, driven by employment and domestic demand. Growth has been more extensive than intensive, with productivity remaining stagnant. Immigration has boosted employment and GDP per capita. The challenge is to raise both employment and productivity by increasing investment and improving its efficiency.

Spain is reducing its deficit and risk premium thanks to economic growth, even in the absence of an approved budget. However, net primary spending is rising above what was committed, and if the cycle cools, confidence could deteriorate.

Climate change is not neutral for potential GDP: unmanaged warming acts as a negative supply shock, while early, credible mitigation and adaptation can offset damages and may generate long-run gains, albeit with high uncertainty and strong scenario dependence.

The economy is showing a growth pattern similar to that of the years prior to the global financial crisis, driven by the same combination of factors. The risk—just as back then, and without necessarily leading to the same outcome—is that this model could generate imbalances if it is not accompanied by structural reforms.

Spain is entering 2026 with one of the strongest growth trajectories in Europe. After expanding by 3.5% in 2024 and 2.9% in 2025, BBVA Research, in its latest forecasts released last December, projects growth of 2.4%.

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.

Once the country left behind the six-year economic crises of the 1980s and 1990s, a new era of macroeconomic stability took hold.