Regional Analysis Spain

The World Cup final modified the consumption pattern: spending increased in supermarkets and fell in food service, reflecting a greater preference for watching the match at home.

Employment increased by 0.5% quarterly SA (2.3% year-on-year), 0.1 percentage points more than in the first quarter, but less than expected. Hours worked and the labour force also increased, while the seasonally adjusted unemployment rate remained stable at 10.2% and the temporary employment rate declined to 15.0%.

The Basque Country economy will maintain growth close to 2% over the two-year period, supported by the strength of the labor market, private consumption and investment, although the deterioration in the international environment increases uncertainty and risks to activity.

Castile and Leon will maintain solid growth, hovering around 2% over the two-year period. This is supported by the recovery of exports, private consumption, and a strong labor market, though it faces greater risks stemming from the international environment.

Discretionary measures linked to geopolitical tensions and severe storms raise the deficit to 2.8% of GDP in 2026. Their withdrawal should reduce it to 2.5% in 2027, but structural expenditure pressures will continue to constrain long-term fiscal consolidation.

The Spanish economy will maintain growth of above 2% in 2026–2027, supported by consumption, services and construction, although the deterioration in the international environment is widening regional differences.

This study analyses the evolution of revenues, expenditures, budget balance, and debt of Spain’s autonomous communities from 2003 to 2025. It adjusts for the impact of atypical factors such as the pandemic in order to show the underlying deficit and the true financial situation.