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The observatory analyzes the behavior of GDP and productivity per full-time equivalent employee in Spain up to the second quarter of 2025. The Spanish economy completed its post-pandemic recovery in that quarter, with GDP per working-age person standing 0.3 percentage points above its trend.

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.

Lima’s Consumer Price Index (CPI) fell 0.10% m/m in October. Despite the decline—driven by lower prices in communications, food, and energy—annual inflation remained virtually stable at 1.4% compared to September, within the Central Bank’s target range.

Consumer prices rose by 2.55% m/m, lower than both consensus (Bloomberg, 2.7%) and our expectation (2.85%), leading to its annual inflation to retreat to 32.9%. We now expect 2025 year-end inflation to be 32.5%, raising upside risks on our 2026 year-end forecast of 23% as well.

National unemployment in September was 8.2%, the lowest for a September in 24 years. Seasonally adjusted, the rate was 8.8%, remaining low. Versus August, the sharp decline was driven mainly by stronger job creation, with employment up 3.1%.

The Central Bank kept its policy rate at 9.25% for the fourth consecutive meeting, a decision reflecting caution amid persistent inflation risks and the ongoing economic recovery.

Economic activity declined (-)0.3% QoQ in 3Q25, reflecting the contraction in the industrial sector (-1.5% QoQ) and the modest growth in services (0.1% QoQ); considering the 3Q25 figure, GDP increased 0.5% as of September.