Spain's economy has performed better than many of its European neighbors, with a GDP growth rate of 2.6% in 2025, as reported by the Spanish National Statistics Institute (INE). This is significantly higher than the average 1.5% growth rate for the rest of the European Union (EU), according to Eurostat. The country has seen a consistent rise in its economic output, with GDP increasing by 3.7% in 2024 and 2.4% in 2023. The government expects 2.6% growth for 2026, while the Bank of France forecasts just 0.4% growth for France in the same year. Spain's public debt has also fallen below 100% of GDP in July 2026, compared to France's debt, which is nearing 120%. The strength of Spain's economy is largely driven by domestic consumption, job creation, and rising wages. According to the INE, the wage cost per worker increased by 4% in the second quarter of 2026. A report by the OECD, published in July, noted that real wages, adjusted for inflation, rose by about 2% during the same period. The Spanish government's repeated increases in the minimum wage—over 60% in seven years—have contributed to this trend. Tourism also plays a major role, with spending by both local and foreign tourists rising by more than 8% in the second quarter of 2026, as reported by Exceltur. Tourism accounts for 12.9% of Spain's total GDP. Business investments have further strengthened the economy, supported by lower interest rates and European financial aid. The European Commission provided 78 million euros to Madrid as part of the NextGenerationEU recovery plan, aimed at helping countries recover from the economic effects of the COVID-19 pandemic. These funds have been used to invest in infrastructure, especially in the energy sector. Spain's significant share of renewable energy in its energy mix has helped the country remain resilient against energy price increases, according to the International Monetary Fund (IMF). Spain's immigration policy, which differs from that of most other European countries, has also contributed to the dynamism of the labor market. According to the IMF, immigration has accounted for nearly 75% of the increase in employment between 2022 and 2025. The government's mass regularization plan for undocumented individuals in the spring of 2026 helped regularize nearly half a million people. This policy has increased the active population, helping to address challenges posed by an aging workforce and labor shortages. Despite these positive developments, Spain still faces several challenges. Per capita income is growing slowly, indicating limited improvements in productivity. Housing has become a pressing issue, with the average rent price per square meter nearly doubling in ten years, reaching 15.1 euros/m² in August 2026, according to the real estate portal Idealista. The price per square meter for purchasing property is now 2,355 euros, an increase of over 50% in the same period. Unemployment remains high, at 9.87% in the second quarter of 2026, according to the INE. The OECD has described unemployment as a "structural" challenge for the Spanish labor market, suggesting it may be a long-term issue.