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Spanish economy 2026: what UK property buyers should watch

23.02.2024 11 min read
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Spanish economy 2026 in short: GDP grew 2.7 per cent on the year in the third quarter on INE's flash estimate, against 1.4 per cent for the UK in the second. Unemployment is more than double the UK's, though, and inflation is 4.9 per cent. For property buyers, interest rates, sterling and the 29 November election matter most.

How is the Spanish economy doing in 2026?

Well on growth, less well on prices. INE, Spain's statistics office, put GDP up 2.7 per cent on the year in the third quarter of 2026, and up 0.6 per cent on the previous quarter. That is a flash estimate, published on 30 October. The second quarter was 2.6 per cent on the year.

Spain has a strong run behind it. GDP grew 6.7 per cent in 2021, 6.4 per cent in 2022, 2.4 per cent in 2023, 3.7 per cent in 2024 and 2.6 per cent in 2025, according to Eurostat. That beat the euro area average in every one of those years. In 2025 the euro area managed 1.2 per cent.

Jobs have followed. Spain had 22.85 million people in work in the third quarter of 2026, up 465,500 on the year. The unemployment rate was 10.18 per cent, up 0.31 points on the quarter. The number of unemployed people was still 21,900 lower than a year earlier.

In May, the European Commission forecast growth of 2.4 per cent for 2026 and 1.9 per cent for 2027. The IMF's current figures are 2.5 and 1.8 per cent, against 1.3 and 1.2 per cent for the UK. That is a slower pace for Spain, but still the faster of the two.

Infographic with six figures on the Spanish economy: GDP growth 2.7 per cent, unemployment 10.18 per cent, inflation 4.9 per cent, public debt 100.5 per cent of GDP, 96.8 million tourists, house prices up 12.2 per cent
Six headline figures for Spain, each with its own period. Tripinvest ES graphic, source: INE and Eurostat.

Spanish economy vs UK: how do they compare?

Spain wins on growth and on the budget deficit. The UK wins on jobs, on income per head and, for now, on inflation. Here are the latest figures side by side.

MeasureSpainUKPeriod
GDP growth on the year2.6 per cent1.4 per centQ2 2026
GDP growth, full year2.6 per cent1.2 per cent2025
Unemployment rate10.18 per cent4.7 per centSpain Q3, UK June to August 2026
Annual inflation (CPI)4.9 per cent3.5 per centSeptember 2026
Central bank rate2.50 per cent3.75 per centOctober 2026
Government debt, share of GDP100.5 per cent102.1 per cent2025
Budget deficit, share of GDP2.4 per cent5.3 per cent2025
GDP per head, adjusted for prices$57,282$65,7582025
Size of the economy$1.91 trillion$4.01 trillion2025

The debt, deficit, income and size rows use IMF figures, so both countries are measured the same way. Spain's third quarter flash is not in the table because the UK has not yet published that quarter. On the EU's harmonised measure, Spanish inflation was 5.0 per cent in September. The UK headline you see in the news, public sector net debt, is a different measure: 94.0 per cent of GDP in September 2026.

The debt line is the surprise. Spain's debt was 119.3 per cent of GDP in 2020, and it has fallen every year since. The UK's has gone the other way since 2023, so Spain now sits slightly below it. The Commission expects Spanish debt to dip under 100 per cent in 2026.

Why is Spain's economy doing so well?

Three things stand out: more people, more tourists and stronger household finances.

People. Spain had a record 49.8 million residents on 1 July 2026, up about 444,000 in a year. Growth came from people born abroad, who now number 10.3 million. The Commission says immigration is supporting both spending and job creation.

Tourism. INE counted 71.7 million international tourists in 2022, 85.2 million in 2023 and a record 96.8 million in 2025. They spent €134.7 billion in 2025, and British visitors alone spent €23.65 billion. Tourism made up 12.6 per cent of GDP and 12.3 per cent of jobs in 2024. This year is still growing: 70.4 million arrivals from January to August, up 5.4 per cent, with 13.9 million from the UK.

Household and business finances. The Commission points to record-low household debt and healthy company finances, and expects EU recovery money to support investment, particularly in construction. On INE's third quarter flash, household spending rose 3.1 per cent on the year and investment 2.1 per cent.

Benidorm skyline and mountains across the bay under heavy cloud
Benidorm from Plaça del Castell, on the Costa Blanca. Tourism made up 12.6 per cent of Spanish GDP in 2024. Photo: Ximonic (Simo Räsänen), Wikimedia Commons, CC BY-SA 4.0.

What is wrong with Spain's economy?

Spain has real weak spots, and a buyer should know them.

  • Inflation jumped. The CPI reached 4.9 per cent in September 2026, the highest since February 2023, and INE's flash for October is also 4.9 per cent. Fuel and package holidays drove the September rise. Core inflation was 3.1 per cent, but you still feel it at the till. On 29 October the ECB warned that the energy shock is likely to push euro area inflation up and growth down. Spain was below the euro area average in 2022 and 2023, then above it in 2024 and 2025.
  • Unemployment is high. At 10.18 per cent it is more than double the UK rate. For under-25s it was 23.33 per cent in the third quarter of 2026.
  • Regional gaps. Unemployment ran from 4.63 per cent in the Balearics to 14.91 per cent in Andalusia.
  • Growth leans on Spain itself. Home demand supplied 2.6 points of the 2.7 per cent annual growth in the third quarter, and trade added almost nothing. The Commission also flags tourism as a risk, especially long-haul travel.
  • Support is ending. EU recovery funds wind down, and the Commission expects tighter public spending in 2027.
  • An election is close. Parliament was dissolved on 6 October and Spain votes on 29 November 2026.

Does the Costa Blanca follow the national economy?

Only partly. Spain has 17 autonomous communities with real powers of their own, so the national average hides a lot. Regional taxes differ too. Before you buy, look at the region as well as the country.

The Costa Blanca sits in Alicante province, in the Comunitat Valenciana. Here is how that region compares.

MeasureComunitat ValencianaSpainPeriod
Unemployment rate11.82 per cent10.18 per centQ3 2026
GDP per head€28,675€34,2372025
GDP growth2.3 per cent2.6 per cent2025
Pay per employee, including employer costs€37,660€40,5142024
International tourists, change on the yearup 9.0 per centup 5.4 per centJanuary to August 2026
House price index, change on the yearup 13.0 per centup 12.2 per centQ2 2026

So this is a poorer region than the national average, with a slightly higher jobless rate. Alicante province alone was at 11.73 per cent. Tourism is growing faster than in Spain as a whole, though, and 9.4 million international tourists came to the region from January to August. It also had the fastest population growth of any region in the second quarter.

Foreign buyers matter more here than anywhere else in Spain. They made 46.43 per cent of home purchases in Alicante province in the second quarter of 2026, the highest share of any province. Locals' wages are therefore only part of the story of who buys. Our guide to where to live in Spain and our Torrevieja property guide go further on individual towns.

Torrevieja seafront promenade with palm trees and lit apartment blocks at dusk
Paseo Juan Aparicio in Torrevieja at dusk, in Alicante province. Photo: Ximonic (Simo Räsänen), Wikimedia Commons, CC BY-SA 4.0.

What should UK property buyers watch?

These are the numbers we would keep an eye on.

What to watchLatest figureWhy it matters to you
ECB rate and EuriborDeposit rate 2.50 per cent, 12-month Euribor 3.247 per cent in SeptemberFeeds into the cost of a euro mortgage
Pound against the euro£1 bought about €1.20 on 30 October 2026Sets your budget in pounds
Spanish inflation4.9 per cent in October, flash estimateAffects day-to-day and running costs
Tourism arrivalsUp 5.4 per cent, January to August 2026Shapes local jobs and town life
Election29 November 2026May bring new rules for buyers
Home sales167,934 in Q2 2026, down about 2 per centShows how busy the market is

Interest rates. The ECB raised its deposit rate in June and again in September 2026, then held it at 2.50 per cent on 29 October. If you want a Spanish mortgage, check current offers, as our guide to mortgages for foreigners explains.

Sterling. The pound has helped British buyers lately. On 30 October 2025, a €250,000 home cost about £220,000 at the ECB rate. On 30 October 2026 it cost about £208,500. That gap of around £11,500 came from the exchange rate alone. It can reverse, so watch the rate before you commit. Irish buyers earn in euro and can skip this one.

The election. The proposed 100 per cent tax on non-EU, non-resident buyers is not law. The Local reported in October that it was never debated, and pending bills lapse when parliament is dissolved. What comes next depends on the new government. ITP on the Costa Blanca is set regionally. It has been 9 per cent on resale homes since 1 June 2026, or 11 per cent on the whole price if the home is worth more than €1 million. Total costs are up to 13 to 14 per cent on top of the listing price, as our guide to purchase costs shows.

House prices. On Eurostat's figures, Spain's house price index rose about 4.4 per cent a year on average from 2014 to 2023, then 8.5 per cent in 2024 and 12.7 per cent in 2025. INE's index was up 12.2 per cent on the year in the second quarter of 2026, and sales were lower. Past figures tell you what happened, not what happens next.

For more background, read our posts on whether Spain is a good market to invest in, Spanish property and inflation and the housing market statistics from early 2024. When you are ready to look at real homes, start with property for sale in Torrevieja.

Frequently asked questions

Is Spain's economy good right now?

On growth, yes. GDP rose 2.7 per cent on the year in the third quarter of 2026 on INE's flash estimate, and 465,500 more people were in work than a year earlier. The weaker points are inflation at 4.9 per cent and unemployment at 10.18 per cent, more than double the UK rate.

Is the Spanish economy growing faster than the UK's?

Yes. Spain grew 2.6 per cent on the year in the second quarter of 2026 against 1.4 per cent in the UK. For the whole of 2025, Spain managed 2.6 per cent and the UK 1.2 per cent. Spain also outgrew the UK in 2023 and 2024, on IMF figures.

Is Spain richer than the UK?

No. The IMF puts GDP per head in 2025, adjusted for prices, at about $57,300 in Spain and $65,800 in the UK. That leaves Spain roughly 13 per cent behind. Prices are lower in Spain, so the gap shrinks once you adjust for them, but it does not disappear.

Where does Spain's economy rank in Europe?

Spain was the fourth largest economy in the EU in 2025, behind Germany, France and Italy, with GDP of about €1.69 trillion according to Eurostat. The UK, outside the EU, is about twice the size. The IMF puts the two at $4.01 trillion and $1.91 trillion.

What is the biggest risk to the Spanish economy?

The clearest near-term risks are inflation, at 4.9 per cent in INE's October flash, and a slowdown in tourism, which the European Commission flags. Tourism made up 12.6 per cent of GDP in 2024, so a weak season matters. EU recovery funds are also ending, and that removes support for investment.

Will the November election change the rules for property buyers?

Spain votes on 29 November 2026, and the proposed 100 per cent tax on non-EU, non-resident buyers lapsed without ever becoming law. A new tax like it would need a fresh bill in the next parliament. ITP on the Costa Blanca is a regional tax, so this election does not set the 9 per cent rate.

Talk to us before you buy

Headline numbers help, but a decision comes down to one town, one street and one budget. Our agents have over 12 years' experience on the Spanish market, and Tripinvest ES has offices in Calpe and Torrevieja and a head office in London. We help you read the local market, we guide you from the first call to the notary, in English, and we keep an eye on deadlines. We work with lawyers and banks. We are a licensed agency, RAICV 4221. Our clients don't pay us commission.

Call us on +44 20 3888 0008 or send us a message.

Talk to us about buying in Spain

Sources

Last checked: October 2026

Spain, official

EU and international

UK, official

Press