Spain’s economy remains a leader in Europe, showing resilience despite global uncertainty and slowing growth across the euro area. Following a year of unexpected strength in 2025, the outlook for 2026 is defined by cautious optimism.

The country is moving away from the high inflation and post-pandemic volatility of recent years. This transition leads toward a more moderate economic environment. However, analysts are monitoring potential challenges such as trade tensions and a cooling labor market.

1. 2025 Recap: A Year of Resilience

The Spanish economy closed 2025 with GDP growth of 2.9%, significantly outperforming initial expectations. According to CaixaBank Research, this momentum was driven primarily by robust domestic demand and a record-breaking labor market, which saw strong employment growth, with Social Security affiliation reaching record highs.

• Booming Consumption: Household consumption remained strong toward the end of 2025, supported by job creation and improving purchasing power.

• Inflation: Prices hovered around the high-2% range in 2025, pressured by persistent costs in services and electricity.

2. Economic Forecasts for Spain 2026

For 2026, GDP growth is expected to settle into a more sustainable rhythm, estimated at 2.1% to 2.2%. The IMF is slightly higher than domestic estimates, revising their forecast upward to 2.3% from a previous 2%.

Growth Drivers for 2026:

• EU Funds (NGEU): The continued rollout of European recovery funds will keep supporting both public and private investment.

• Interest Rates: Around three-quarters of economists surveyed by Reuters expect the European Central Bank to keep the deposit rate steady at 2.00% through the end of the year, a stance that would offer welcome relief for households and businesses after several years of higher borrowing costs.

• Purchasing Power: A gradual recovery in real income and a drop in the unemployment rate to 9.8% will support continued household spending.

3. The "Trump 2.0" Effect: US Tariff Impact

Despite global uncertainty, Spain’s direct exposure to potential US tariffs is relatively low. Goods exports to the US represent just over 1% of Spain’s GDP.

Caixabank Research estimates that a 15-point increase in tariffs could reduce GDP by around two-tenths of a percentage point in a downside scenario. The most exposed sectors include:

• Chemical and pharmaceutical products.

• Industrial machinery, engines, and oils (including olive oil).

4. Spain vs. the Eurozone

Spain continues to lead growth among the major Eurozone economies. While the Eurozone GDP grew by a modest 0.3% quarterly at the end of 2025, Spain grew at 0.6%. Currently, Spain’s economy is larger than before the pandemic, outperforming the eurozone average.

5. How It Affects Your Money in 2026

Mortgages and Housing

If you have a variable-rate mortgage, most economists expect the ECB to hold rates at 2.00% over the coming quarters, suggesting the Euribor could finally provide a steady reprieve in 2026. However, housing prices will remain under pressure as household formation (demand) continues to outpace new housing supply.

Workers and Employment

The European Commission expects Spain’s unemployment rate to drop below 10% for the first time in years. It also sees wages continuing to grow faster than 2025’s inflation rate, giving workers some welcome breathing room after the recent cost-of-living squeeze—even if those gains are likely to slow over the next couple of years.

Savers and Retirees

• Savings: Spanish households are still holding on to a healthy savings buffer. The savings rate sits around 13% of disposable income, well above pre-pandemic levels. Economists expects that cushion to thin gradually as people spend more and job conditions improve.

• Retirement: The projected inflation of 2.0% for 2026 is good news for maintaining the purchasing power of pensions. However, the cost of services (leisure, home repairs) may continue to drop more slowly than the price of goods.

This analysis used data from CaixaBank Research (January 2026), the Bank of Spain, the European Commission, and the IMF.