Spain | Regional Outlook. March 2026

Summary

The Spanish economy will maintain its expansion in 2026 and 2027 with GDP growth of 2.4%, driven by tourism, immigration, and public policies. However, geopolitical uncertainty and structural challenges will generate a heterogeneous impact across the different autonomous communities.

Key points

• Key points:
• The Valencian Community will lead growth in 2026 with 3.0%, supported by the reconstruction after the DANA, followed by Madrid (2.7%), the Balearic Islands, and the Canary Islands (2.5%), benefiting from dynamic service exports.
• The Cantabrian communities will grow below average due to energy costs and external slowdowns, while Andalusia and Catalonia will advance at 2.4%, compensating for weaknesses with the tourism boost.
• A sustained 10% increase in the price of imported fuels could subtract up to two tenths from accumulated GDP growth over the next two years and add three tenths to national inflation.
• The foreign population explains between 12% and 38% of the increase in GDP per capita since 2023, being fundamental to avoid bottlenecks in the labor market given the stagnation of productivity.
• The lack of electrical capacity, with 88% of distribution nodes saturated, poses an additional obstacle for housing construction and worsens the real estate deficit in the most dynamic areas.

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