Spain’s economy must shift from ‘extensive’ to productive growth in order to keep growing, says Esade
Spain is growing more than its European partners but the challenge is no longer just about maintaining the same pace but achieving better growth. The Esade Economic and Financial Report (1st semester 2026), edited by the Esade professor Omar Rachedi and produced in conjunction with Banco Sabadell, finds that the Spanish economy has established itself as the most dynamic major economy in the eurozone, although it must bolster its productivity in order to uphold its medium- and long-term growth.
According to the report’s forecasts, Spain will grow by 2.3% in 2026, underpinned by more balanced domestic demand, sustained job creation and dynamic consumer behavior. This combination explains a great deal of Spain’s better performance than its European partners, together with its lower reliance on heavy industry and the greater resilience of its productive fabric.
The report also pinpoints beneficial changes that set the present cycle apart from previous ones, including genuine structural transformations such as the current account surplus, the deleveraging of the private sector and the rise of exports of non-tourism services, particularly in spheres such as technology, consulting and professional services.
However, the analysis warns that there is no guarantee that this growth is sustainable. The chapter about today’s scenario, by the Esade professor Josep M. Comajuncosa, and Manuel Hidalgo, professor at Pablo de Olavide University and senior fellow at EsadeEcPol, highlights that to a considerable extent the growth of Spain’s economy remains extensive. To be precise, some two thirds of growth between 2021 and 2024 are accounted for by an increase in employment – not by greater productivity. There are also domestic complications, particularly difficulties in finding housing, energy prices and fiscal policy restrictions, in addition to geopolitical and financial risks abroad.
To ensure medium- and long-term growth, the Esade experts recommend the reorientation of production to focus on productivity; the removal of red tape and regulatory hurdles that prevent the housing market from responding to demand; the simplification of matters enabling companies to grow bigger; and the fostering of investment in intangible assets such as R&D, software and the training of human capital. Against this backdrop, they also underline the potential of AI as a catalyst for improved efficiency – providing that its implementation is accompanied by appropriate training.
Moderate global growth but greater uncertainty
On the international landscape, the global economy has been remarkably adaptable. In 2025, it maintained a growth rate of 3.3% despite the trade war driven by the second Trump Administration. This performance was possible thanks to the temporary suspension of some of the planned tariffs, the redrawing of trade routes, the dynamism of the tech sector, particularly as regards A.I., and favorable financial conditions, underpinned by fiscal stimuli and the flexibility of the private sector.
Forecasts for 2026 prior to the outbreak of the Middle East conflict suggested stable growth similar to that of 2025 both globally and regionally. This scenario was based on falling global inflation and financial conditions that would benefit by investors’ positive expectations and the likelihood of more expansive monetary policies by major central banks.
However, the vulnerabilities mentioned earlier, such as the reliance of a few sectors and the risk of an increasingly aggressive trade war, have been joined in recent months by an escalation of geopolitical conflicts, especially in the Middle East and Ukraine, and the ensuing significant increase in global uncertainty.
Geopolitical risks with an economic impact
The authors of the chapter about today’s landscape in the Esade Economic and Financial Report warn that these conflicts could have a negative impact on supply as a result of higher costs of certain raw materials, disrupted maritime trade routes, and problems in global supply chains. In the event of an escalation, the fallout would quickly affect the entire global economy due to higher energy prices and transportation costs.
These complications would be aggravated by weaknesses in the financial sector and the fiscal vulnerability associated with high levels of public borrowing in many countries. Uncertainty about the fiscal sustainability of some major economies could put a strain on lending, lead to stricter financial terms globally, and increase market volatility.
The 38th edition of the Esade Economic and Financial Report, entitled ‘La Europa que falta: capacidades para un mundo hostil’ (The missing Europe: capabilities for a hostile world) produced with support from Banco Sabadell, includes contributions by Nicolás de Pedro, senior fellow at the Institute for Statecraft and author of the article “Europa frente al desafío estratégico de las amenazas híbridas” (The strategic challenge of blended threats facing Europe); Federico Santi, senior analyst for Europe at the Eurasia Group, who penned the article “El largo camino de la UE hacia la 'autonomía estratégica' en defensa” (The long road of the EU towards strategic self-reliance in terms of defence), and Raquel Jorge Ricart, head of European Affairs and the Brussels branch of Adigital, with “La agenda tecnológica de la UE: cinco palancas para crear indispensabilidad estratégica / para ser estratégicamente indispensable” (The EU’s tech agenda: five factors to ensure strategic indispensability / to become strategically indispensable). The Esade economics professor and academic editor of the report, Omar Rachedi, brings the discussion sector to a close with his article “Cuando el dinero se convierte en arma” (When money becomes a weapon).
