Updated: August 13, 2026

Renewed fighting around the Strait of Hormuz has put energy markets back in the spotlight just as Spain enters the busiest weeks of its summer tourism season, with the total solar eclipse expected to generate an estimated €347.6 million in net economic impact. At the same time, another summer of extreme heat is driving up electricity demand at home. Together, geopolitical tensions and climate-related pressures are pushing inflation higher again, even as resilient growth, strong employment and another record year for tourism keep Europe's fastest-growing major economy on course.

Tourists are flocking to northern Spain to view a potentially once-in-a-lifetime total solar eclipse on Aug. 12. Spain's tourism minister expects around 446,700 additional visitors for the event, pushing accommodation in many areas along the eclipse path toward or at full capacity.

Just weeks after markets welcomed a temporary easing of tensions between the United States and Iran, renewed fighting in the Middle East has once again placed energy at the center of the global economic outlook. The collapse of the ceasefire has renewed concerns over shipping through the Strait of Hormuz, triggering fresh volatility in oil markets and raising new questions about inflation just as millions of Europeans are in the thick of their summer vacations.

Families filling up their cars for road trips or booking last-minute flights are once again facing higher transport costs, while another summer of record-breaking heat has pushed up electricity demand as households and businesses rely more heavily on air conditioning.

To add to the everyday struggles, wildfires have burned through large areas of the country, stretching emergency resources and reinforcing the growing economic cost of climate-related disasters.

The eclipse economy

Spain's August 2026 total solar eclipse is giving the country's tourism economy another boost during an already exceptionally busy summer. An economic impact study by the Ministry of Economy, Trade and Business estimates the Aug. 12 event will attract 446,700 additional tourists across 36 provinces along the path of totality and nearby areas, generating €347.6 million in net economic impact. Additional tourism spending is estimated at €342.2 million, including €247.3 million from international visitors and €94.9 million from Spanish residents.

Demand is already showing up in the numbers. Hotel bookings for August are 17.8% higher than a year earlier, while scheduled airline seats for eclipse week are up 7.9%. The government estimates there are more than 1 million accommodation spaces across hotels, apartments, campsites, rural lodgings and tourist rentals in the affected areas, giving the regions capacity to absorb the influx.

The eclipse is also attracting some high-profile visitors. SpaceX, the aerospace company owned by Elon Musk, has booked the entire Parador de Lerma in Burgos for a private delegation of around 140 people watching the eclipse.

Spain inflation rises on higher energy costs

Spain's annual inflation rate accelerated to 3.6% in July from 3.2% the previous month, according Spain’s National Statistics Institute (INE) data. Core inflation, which excludes volatile food and energy prices, also edged up to 3.0%. Across the eurozone, headline inflation rose to 2.9%, with core inflation increasing to 2.5%.

The renewed rise in prices was driven largely by energy. CaixaBank Research noted that the breakdown of the US-Iran memorandum of understanding and the resumption of hostilities around the Persian Gulf contributed to higher fuel prices during July, while prolonged heat waves increased electricity demand, lifting wholesale power prices. Transport services, particularly air and rail travel during the peak holiday season, also became more expensive. Food prices, by contrast, continued to ease, helping offset some of the broader inflationary pressure.

Only a month ago, lower energy prices had encouraged expectations that inflation would continue moderating through the second half of the year. The latest developments have made that path less certain as economic uncertainty is back on the forefront.

Spain keeps outperforming Europe

Despite renewed inflationary pressure, Spain's economy continues to show remarkable resilience.

Preliminary data from INE showed GDP expanded 0.7% during the second quarter compared with the previous three months, slightly faster than the pace recorded at the start of the year. On an annual basis, the economy grew 2.7%, while full-time equivalent employment increased 2.3%, underscoring the strength of Spain's labor market despite a more uncertain global backdrop.

The figures broadly support CaixaBank Research's decision to raise its 2026 growth forecast to 2.4%, making Spain one of the fastest-growing major economies in Europe. Domestic demand remains resilient, unemployment has fallen below 10% for the first time in years, and another record summer for tourism continues to provide a powerful tailwind for growth.

Spain's labor market stays strong

The labor market remains one of Spain's biggest strengths. Employers created 486,000 jobs during the second quarter, lifting total employment to a record 22.8 million workers, while the unemployment rate fell to 9.9%, dropping below 10% for the first time in years.

Job creation was concentrated in sectors closely tied to domestic investment and consumer spending. Employment growth accelerated in construction, where payrolls expanded 7.4% from a year earlier, while the much larger services sector also picked up pace, supported by another busy summer for tourism and hospitality. Growth slowed in agriculture and manufacturing but remained positive, suggesting Spain's labor market continues to broaden rather than relying on a single industry.

Nearly half (49%) of the jobs created during the quarter were filled by foreign workers, compared with an average of around 25% in second quarters between 2023 and 2025. Over the past year, 94% of all new jobs were created in the private sector, underscoring that the country's employment gains continue to be driven primarily by businesses rather than public hiring.

Economic cost of wildfires in Spain

Tourism remains central to Spain's growth story. Hotels, restaurants and retailers continue to benefit from another busy summer season, even as higher transport costs begin filtering through to travelers. 

Another summer of extreme heat, however, is escalating a “worrying” trend. Major reinsurer, Munich Re, warns that increasignly destructive fires will inevitably carry a greater economic cost as climate-related disasters intensify. 

More than 200,000 hectares had already burned by late July, putting Spain on pace to exceed the more than 350,000 hectares lost during last year's wildfire season. Europe is currently the fastest-warming continent, warming at more than twice the global average rate, according to the company's latest natural catastrophe report.

The financial impact extends well beyond wildfires. Munich Re estimates that nine winter storms that swept across Spain and Portugal earlier this year caused around $7.7 billion (€6.7 billion) in economic losses, accounting for roughly 80% of all natural disaster losses in Europe during the first half of 2026.

For an economy where tourism, agriculture and infrastructure all depend heavily on stable weather, extreme climate events are becoming as significant as inflation and interest rates.

The cost of living remains a challenge

Spain's economic performance has consistently exceeded expectations, but that has not necessarily translated into a stronger sense of financial security for many households.

Speaking on CaixaBank Research's Economía Express podcast, economist Adrià Morrón said Spain continues to outperform many of its European peers, yet headline indicators such as GDP do not fully capture the pressures households face from rising housing costs and the increasing price of everyday services.

The disconnect has become one of the defining characteristics of Spain's post-pandemic recovery. Employment continues to grow and the economy remains resilient, but housing affordability remains one of the country's biggest structural challenges. Rising costs for transport, insurance and other everyday services have also continued to weigh on household budgets.

Renewed energy inflation risks adding another layer of pressure. Higher fuel costs eventually ripple through supply chains, increasing costs for airlines, freight companies, manufacturers and consumers long after crude oil prices begin moving.

ECB holds deposit rate

The European Central Bank left its deposit rate unchanged at 2.25% in July, maintaining a cautious stance as policymakers assess whether higher energy prices will become embedded in broader inflation.

The central bank has emphasized that future decisions will depend on incoming economic data. With energy once again driving inflation higher, attention is now turning toward September's policy meeting, when officials will have a clearer picture of whether recent geopolitical tensions are proving temporary or more persistent.

What comes next for Spain's economy

Spain's economy has entered the second half of the year in better shape than many economists expected. Growth remains robust, unemployment has fallen below 10% and another strong tourism season is helping offset a more uncertain international backdrop.

Energy has returned as the dominant force shaping the outlook, driven both by renewed instability in the Middle East and another summer of extreme heat across Europe. Those pressures have already begun feeding through to transport costs, electricity prices and inflation.

The months ahead will be revealing on whether those higher energy costs prove to be a short-lived interruption or a more persistent headwind for households and businesses.

Article has been updated to include the economic impact of solar eclipse tourism and INES' final July CPI figure.