The Spanish economy closed 2025 with a positive balance, especially if one takes into account that the international context has been marked by the global slowdown and more fragmented trade relations. GDP growth close to 3% annually once again places Spain among the most dynamic economies in the euro zone, confirming a notable capacity for resistance to adverse external shocks. This good performance has been supported, almost exclusively, by domestic demand. Household consumption has been the main driver of activity (boosted by intense migratory flows), driven by the strength of the labor market, the increase in real wages and more contained inflation that has allowed households to recover purchasing power. To this has been added a private investment that has surprised on the rise, especially in capital goods and non-residential construction, partly linked to the boost in defense spending and projects associated with productive transformation. However, not everything is bright. The foreign sector has established itself as the main factor of fragility of growth. Exports of goods have suffered from the deterioration of world trade and trade tensions, particularly the indirect impact of new US tariffs, while imports have continued to grow in the heat of domestic demand. Only the dynamism of service exports, both tourist and non-tourist, has made it possible to cushion a more intense negative contribution from the foreign sector to the GDP. Looking ahead to 2026, the scenario points to a moderation of growth to rates around 2.2% annually, consistent with an economy that is entering a more mature phase of the economic cycle. Domestic demand will continue to support expansion, although with less intensity, in a context of normalization of job creation and less fiscal impulse. Consumption will continue to benefit from rising real wages and a growing population, while investment will maintain a positive bias, supported by defense spending and a gradual recovery in residential investment. Risks, however, remain. The persistent weakness in trade in goods, high geopolitical uncertainty and the need to reorient exports towards new markets will be key factors to monitor. At the same time, the structural challenge continues to be to improve productivity, a necessary condition to transform the current cyclical vigor into sustainable growth in the medium term. In short, Spain reaches 2026 with a solid economy, but with clear challenges: consolidate the change in the productive model, reinforce external competitiveness, and take advantage of the current context to lay the foundations for more balanced and lasting growth. María Romero and Marina García are professors at Afi Global Education.
