Spain’s economy continues to outpace much of Europe, but economist Marc Vidal points to warning signs behind the headline numbers. Rising tax revenue, persistent inflation, and a population boom are reshaping the real story of Spanish growth.
Official forecasts from Brussels put Spain’s GDP growth at 2.4% this year and 1.9% next year. S&P Global Ratings and the OECD expect Spain to keep growing between 2.3% and 2.6% in 2026. That’s still above the eurozone average. But the pace is slowing. Analyst Marc Vidal says the real story sits beneath these numbers. He wants people to look closer at what’s driving the growth.
Vidal spoke on Herrera en COPE. He didn’t sugarcoat the outlook. Spain is outpacing most of Europe, but the speed is dropping. The reasons for growth are changing. That could spell trouble. BBVA Research data shows the last quarter’s 0.7% GDP rise came mostly from strong domestic demand. People are spending more at home. That’s now the main engine.
Despite robust nominal growth, S&P Global Ratings forecasts inflation in Spain to reach 3.2% in 2026, outpacing the eurozone average and directly impacting real household incomes.
Population growth stands out. Vidal points out that more people are working, but it’s because more people are arriving. The labor force is swelling faster than jobs are created. The result? Growth gets spread thin. Vidal put it simply: “The cake is bigger because more people are sitting at the table.” But the average slice—GDP per person—has stopped growing fast. BBVA Research, OECD, and S&P forecasts all agree. Spain’s overall growth looks strong, but per capita gains are much weaker. Nominal numbers are up, but real household gains lag behind.
Inflation is another problem. It’s set to hit 3% this year. That pushes the economy’s nominal size up, making headline growth top 5%. But it’s a mirage. Carlos Herrera pointed out that Spain’s tax authority is pulling in revenue four times faster than the real economy is growing. VAT and personal income tax receipts have jumped about 10%. The deficit shrinks, but not because of tax hikes. The European Central Bank expects eurozone inflation to average 3.0% in 2026. Spain’s inflation isn’t unique, but it’s biting harder here.
Public finances look better on paper. But Vidal says the drop in debt below 100% of GDP is not from paying off what’s owed. It’s because nominal GDP is bigger, thanks to higher prices. The real debt burden hasn’t budged.
AIReF projects that Spain will end 2026 with public debt at approximately 99.9% of GDP, indicating that the drop below the 100% threshold is largely due to nominal GDP growth rather than real debt reduction.
Some numbers do look good. Unemployment is under 10% for the first time since 2008. European funds keep coming in. The deficit has stayed at 2.4% for two years. But Vidal calls these supports fragile. He warns that Spain leans too much on population growth, inflation-fueled tax revenue, tourism, and European money. If any of these weaken, risks could hit fast. The ECB’s latest bulletin says the eurozone’s fiscal outlook is tough. It projects a 3.6% budget deficit and rising debt in 2026. Spain is not alone in this struggle.
Spain’s growth story is not simple. The numbers look strong, but the ground is shifting. The country relies on outside drivers and inflation boosts. The real test comes when those supports fade. Vidal’s warning is blunt. Spain’s growth is real. So are the risks.
