Spain’s Economy Set to Outperform Europe with 2.5% Growth in 2026

Spain is expected to post strong economic growth in 2026, with its GDP projected to increase by 2.5%, surpassing growth rates across Europe and marking a rise from the 2.1% forecast made in October 2025. This upbeat outlook highlights Spain’s status as a key player in the European and global economy, notably outpacing advanced economies expected growth of 1.7%, the European Union’s 1.4%, and the eurozone’s 1.2%. Major European countries such as Germany, France, Italy, and the UK are projected to grow at significantly lower rates—around 1%, 0.9%, 0.8%, and 1%, respectively.

The main drivers behind Spain’s robust expansion include increased investment, particularly accelerated deployment of European Next Generation EU (NGEU) funds, alongside stable domestic demand strengthened by immigration. Despite a moderation compared to previous years, 2026 is anticipated as a phase of consolidation for the Spanish economy.

Globally, economic growth is expected to slow slightly to 2.6% from 2.8% in 2025 amid ongoing geopolitical, financial, and macroeconomic risks. The United States is forecasted to grow by 2.2%, while China’s growth is predicted to slow to 4.4%, and India is projected to lead at 6.1%. Remarkably, global trade volumes increased by 3.9% in 2025 despite rising tariffs.

In contrast to the positive national outlook, Spain’s industrial sector continues to face challenges. Over the past two decades, industry’s share of GDP has declined sharply from nearly 18% in 2000 to an estimated 11.8% in 2024, due to globalization and the aftermath of the global financial crisis. Employment in the industrial sector similarly fell from 13.5% in 2006 to 9.9% by 2024, trailing European Union averages. Indicators such as the manufacturing PMI at 49.2 suggest ongoing contraction.

This industrial decline has resulted in numerous closures and relocations of companies like Santana Motors and Nissan, though there have been some reindustrialization efforts, including new projects by Ebro and improved operations by companies like Seat. High energy prices and competition from subsidized Asian imports, especially from China, remain critical obstacles, prompting demands for protective policies to safeguard Spain’s industrial competitiveness.

Overall, while Spain’s national economy displays strong growth prospects driven by investment and domestic demand, structural challenges in industry persist, highlighting a complex but generally positive economic landscape for 2026.