OECD Economic Surveys: Spain 2025

Spain's economy has grown steadily in the last years, surpassing European peers. Growth has been supported by strong investment, rising service exports, and an expanding labour force, and is set to stay robust but moderate amid global uncertainty in 2026-27. Public finances have improved, but long-term fiscal sustainability and sustained growth need rebalancing revenues toward less distortionary taxes, containing pension costs, and prioritising growth-enhancing spending. Achieving income convergence with peer OECD countries requires boosting productivity growth and facilitating SMEs scale-up by promoting market-based financing, easing regulatory burdens, and simplifying access to public R&D support. An ageing population and low employment among older workers present increasing challenges for the economy. Reforming the non-contributory unemployment assistance and scaling-up adult learning can strengthen incentives to remain in employment. It is also key to align better migration and skills policies with evolving labour market needs. Spain is highly exposed to extreme weather events, which require strengthening resilience via targeted investment, improved land-use planning, and stronger flood protection. To meet decarbonisation objectives, policies should continue to foster investment in low-carbon transportation, electricity grid infrastructure and storage.