Regional Analysis Spain

The consumption indicator continues the improvement started in mid-October, confirming a shift from the downward trend previously observed across different sectors and regions.

Galicia's economy will maintain solid growth in 2026–2027, supported by employment, consumption, exports and expansionary fiscal policy. The external environment will continue to affect industry and investment, while challenges related to productivity, housing and labor availability persist.

Employment increased by 0.3% quarterly SA (2.1% year-on-year) in the third quarter, two tenths less than in the second. Hours worked and the labor force also grew, while the unemployment (10.2% SA) and temporary employment (14.9% SA) rates barely changed for the second consecutive quarter.

BBVA Research forecasts growth of 2.6% in 2026 and 2.1% in 2027. Extending the business-cycle decomposition through end-2026 points to a slowing expansion: demand and credit offset supply-side constraints, while weak productivity limits convergence with the EU8.

Tourism spending in Spain is driven by foreign demand, which grew 8.8% year-on-year between May and August 2026. This dynamism offset the slowdown in domestic tourism, where spending increased by only 2.5%. Total spending grew by 5.7%, exceeding the pace between January and April 2026.

The analysis of regional data in Spain since 2000 reveals a growing divergence in productivity per worker. Regions with the highest demographic and employment growth experience an increase in total GDP but slower growth in GDP per capita, which hinders economic convergence.

The Spanish economy will maintain solid growth of 2.6% in 2026 and 2.1% in 2027, supported by employment, consumption and services. Higher energy costs, inflation and interest rates will weigh on activity, while structural challenges to growth persist.