Spain Economic Outlook. December 2025

Summary

Spanish GDP growth will reach 2.9% in 2025, driven by domestic demand and strong job creation derived from immigration. In 2026 and 2027, the expansion will continue at a rate of 2.4% and 2.0%, supported by the improvement in disposable income and European funds.

Key points

• Key points:
• Inflation will continue its slow decline to 2.5% and 2.2% in 2026 and 2027, which will facilitate the recovery of the purchasing power of wages, in a context of lower electricity prices than in the rest of Europe.
• The labor force will continue to increase, allowing the creation of around 480,000 jobs on an annual average over the next two years, although the unemployment rate will remain structurally high at around 10%.
• Housing investment will accelerate by 6.2% and 6.4% in the next biennium, but sales will remain stable at 725,000 units per year due to the lack of supply, causing price increases of more than 10% this year.
• Fiscal policy will become contractionary starting in the second half of 2026 due to the depletion of European funds, while investment in artificial intelligence offers an opportunity to raise total productivity.

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