Updated: 15 July 2026

Now that Spain is through to the FIFA World Cup final, millions of fans are expected to pack bars, restaurants and fan zones across the country—giving an extra lift to an economy that is already heading toward a record summer.

The football excitement comes as Spain moves closer to a historic milestone. The Spanish government expects the country to welcome 100 million international tourists in 2026 for the first time, with 43 million foreign visitors forecast between June and September. Those travelers are expected to spend nearly €64 billion this summer, around 10% more than in 2025, providing a major boost to hospitality, retail and local businesses despite ongoing geopolitical uncertainty.

The upbeat outlook is backed by broader economic data. Spain's economy accelerated at the end of the second quarter, inflation held steady despite higher electricity and natural gas taxes, and falling oil prices following the US-Iran memorandum of understanding helped ease fears of another energy-driven inflation shock.

Overall, the latest figures suggest Spain continues to outperform many of its European peers as the second half of 2026 gets underway.

Spain's economy gains momentum heading into the second half of 2026

Fresh economic indicators point to stronger momentum as Spain enters the third quarter. According to CaixaBank Research, leading indicators suggest the economy reaccelerated toward the end of the second quarter, led by a rebound in the services sector. Spain's Services PMI rose to 54.2 in June, its highest reading since December and comfortably above the 50-point threshold that signals expansion.

While manufacturing remained slightly below the 50-point mark, stronger domestic demand continued to offset weakness in the industrial sector.

Consumer activity also improved. Retail sales rebounded in May, rising 0.6% month over month after April's slowdown, while annual retail sales growth accelerated to 1.3%. Industrial production also surprised to the upside, increasing 3.4% year over year, reinforcing signs that economic activity strengthened heading into the summer.

Spain's external sector has also remained resilient despite a weaker global trade environment. According to the government's latest foreign trade report, services exports continue to perform strongly while businesses diversify into new international markets. Although softer demand across parts of Europe has weighed on some goods exports, Spain's trade performance has proven more resilient than many analysts expected, providing another source of support for growth alongside tourism and domestic consumption.

The labor market also continued to underpin the expansion. Social Security registrations rose during the second quarter, although part of the increase reflected the government's regularization of roughly 160,000 undocumented migrants. Excluding that one-off measure, CaixaBank Research estimates underlying employment growth remained healthy, highlighting the resilience of Spain's domestic economy.

Spain inflation holds steady despite higher energy taxes

One of the biggest surprises this month is what didn't happen. Expectations of inflation to accelerate after temporary tax reductions on electricity and natural gas expired at the beginning of June didn’t eventuate. Instead, Spain's headline inflation remained unchanged at 3.2% in June for the third consecutive month, while core inflation eased to 2.9%, according to the National Statistics Institute (INE).

Following the US-Iran memorandum of understanding and the reopening of the Strait of Hormuz, oil and gas prices retreated sharply. Crude oil prices fell by roughly 20%, while natural gas prices also declined significantly, pushing gasoline and diesel prices lower and offsetting much of the upward pressure created by higher electricity and gas taxes.

If oil and gas prices remain near current levels, CaixaBank Research says Spain's average inflation rate could finish 2026 below its current 3.5% forecast, offering additional relief for households. Food inflation continued to moderate, while services inflation remained relatively elevated at 3.9%, reflecting persistent price pressures in areas such as housing, hospitality and travel. The rental market remains heated as prices continue to rise.

According to Pisos.com, asking rents across Spain rose 4.22% during the first half of 2026, pushing the national average to €14.81 per square meter per month. Madrid, the Balearic Islands and Catalonia remained the country's most expensive rental markets, while demand continued to outpace available supply in many major cities. The data suggests that even as headline inflation stabilizes, housing affordability remains a growing challenge for many households.

World cup fever meets a record tourism season

Spain's hospitality industry was already expecting an exceptional summer before football fans added another reason to celebrate. According to projections from Turespaña, around 43 million international tourists are expected to visit Spain between June and September, expecting to spend nearly €64 billion—a 10% increase compared with last summer.

Industry and Tourism Minister Jordi Hereu says Spain remains on track to welcome 100 million international visitors in 2026, a milestone that would further cement the country's position as one of the world's leading tourist destinations.

Just as tourist spending continues to grow faster than visitor numbers, reflecting a broader shift toward higher-value tourism. The government also expects spending to grow more quickly in emerging destinations than in Spain's traditional tourism hotspots, supporting its strategy of spreading tourism more evenly across the country.

The forecasts underscore Spain's resilience in an increasingly uncertain global environment. Despite trade tensions and recent conflict in the Middle East, the government expects tourism to remain one of the country's biggest growth engines, supporting millions of jobs and helping offset weaker external demand elsewhere in Europe.

Eurozone inflation cools as the ECB turns more cautious

Across the eurozone, annual inflation slowed to 2.8% in June, while core inflation eased to 2.4%, strengthening expectations that the European Central Bank will leave interest rates unchanged at its July meeting. Markets expect a rate hike in September, taking the deposit rate to 2.50%

At the ECB's annual forum, policymakers acknowledged that easing energy prices have reduced some of the inflation risks that dominated earlier this year. However, renewed hostilities between the US and Iran in early July revived uncertainty, with markets now pricing in the possibility that the ECB's deposit rate could reach 2.75% in 2027, according to CaixaBank Research.

A more patient ECB would help limit additional increases in borrowing costs for households and businesses while supporting Spain’s continued economic expansion.

IMF: Global Growth Holds Up, but Risks Are Rising

The International Monetary Fund (IMF) struck a cautiously optimistic tone in its latest World Economic Outlook update, projecting global GDP growth of 3.0% in 2026 and 3.4% in 2027. While the global economy has proven more resilient than many expected, the IMF warned that the balance of risks remains tilted to the downside.

One of its biggest concerns is that the progress in bringing inflation back under control has slowed, with renewed geopolitical tensions in the Middle East threatening to reignite energy price pressures. Although oil prices retreated following the US-Iran memorandum of understanding, the IMF cautioned that any renewed escalation in the region could quickly reverse those gains and push inflation higher again.

IMF also highlighted another major risk: artificial intelligence. While the global AI investment boom is supporting growth, productivity and corporate investment, the IMF warned that overly optimistic market expectations could trigger a sharp repricing of AI-related assets if earnings fail to keep pace with valuations. The warning echoes recent concerns from the Bank for International Settlements (BIS), which has cautioned that the race to dominate artificial intelligence could increase financial market vulnerabilities.

Spain’s economic outlook

Spain's economy is expected to remain one of Europe's strongest performers in 2026, with growth driven primarily by domestic demand rather than exports. Strong population growth fueled by immigration, elevated household savings, continued investment and robust services exports are expected to offset weaker goods trade.

CaixaBank Research forecasts Spain's GDP will expand by 2.1% this year, well above the 0.7% growth expected for the eurozone. Recent improvements in economic activity and lower energy prices have also tilted risks to the upside, although economists caution that renewed geopolitical tensions could quickly alter the outlook if they trigger another spike in energy costs.

At the same time, economists continue to monitor emerging risks, including the economic cost of increasingly frequent heatwaves, which are putting pressure on household energy bills, reducing labor productivity and weighing on sectors such as agriculture and construction.

But on a positive note, should La Roja deliver another world cup victory, it’ll boost hospitality as celebrations spread. A resilient labor market, strengthening domestic demand, a resilient export sector and a tourism industry heading toward 100 million international visitors continue to provide a solid foundation for growth.

This article has been updated to include the IMF's latest global economic forecasts following renewed US-Iran tensions. It has also been updated after Spain advanced to the FIFA World Cup final and following the INE's confirmation of Spain's June inflation figures.