Qatar National Bank (QNB) considered that the Spanish economy has risen from the bottom of crises to the forefront of growth, as it has transformed in the past few years from an economy severely damaged by crises to a leader in growth through structural reforms that were able to change the economy’s prospects.
The bank explained, in its weekly report, that Spain, after it was once considered among the most fragile European economies, has now emerged as one of the most dynamic, which means that even the most affected economies on the continent can, over time and through reform, achieve a sustainable recovery.
The report indicated that despite this, challenges remain, as the unemployment rate is still high by European standards, public debt is approaching 100 percent of GDP, and maintaining strong productivity growth in the long term remains difficult.
The report mentioned the reality of the Spanish economy, which was considered a model that reflects the state of economic weakness that Europe has suffered in recent years, noting that after the collapse of the housing market bubble and the sovereign debt crisis in the Eurozone, Spain was classified as one of the fragile peripheral economies whose financial solvency the markets were openly questioning, and the unemployment rate reached its peak at more than 26 percent in 2013, and the banking system needed a rescue package worth 100 billion euros, while the general budget deficit reached a percentage of Two numbers.
He added: “Today, the picture is completely different. Spain has become one of the best-performing advanced economies, as its economy grew by 3.2 percent in 2024 and by 2.8 percent in 2025, far outpacing the Eurozone, which grew by just over 1 percent. Spain is expected to lead the single currency bloc again in 2026.”
The report indicated that this transformation reflects a combination of difficult-to-achieve structural adjustment and favorable winds that have reshaped the Spanish growth model. After the economy was largely dependent on the construction sector and exposed to external shocks, today it is based on a broader and more resilient base.
In its weekly report, Qatar National Bank addressed three factors behind the transformation witnessed by Spain, which is the more competitive and diversified export base, the demographic and labor market recovery, and the dynamics supporting investment and energy, noting that the painful adjustment process that followed the crisis contributed to restoring competitiveness and expanding the export base in the economy, as large-scale reforms were introduced to the labor market in the years after 2010, which promoted stable and permanent employment, and wage control also reduced unit labor costs, making Spanish companies are more competitive internationally and support the export recovery.
In its weekly report, Qatar National Bank indicated that the Spanish government restructured and merged fragile regional savings banks, which helped stabilize the financial sector, considering that Spain has established its position as a major destination for new foreign projects and technical talent, with the support of digital nomad initiatives.
The report added that these improvements to the Spanish economy allowed for the expansion of exports of higher value-added services in areas such as finance, information technology, and professional services. The result was a more diversified economy, more immune to shocks, and a shift from a chronic, historical trade deficit to record current account surpluses.
Regarding the demographic and labor market recovery that drove economic growth, Qatar National Bank said: “After the global financial crisis caused the loss of more than three million jobs, employment levels have since recovered to reach record levels, and the unemployment rate, although still among the highest in the euro area, fell to about 10 percent, less than half of its peak recorded in 2013. One of the main factors behind this was the influx of highly skilled workers, especially from Latin American countries that share cultural commonalities with Spain.
He continued: “This led to the expansion of the working-age population and the labor force at a time when large parts of Europe were experiencing population aging and demographic contraction. This influx of workers also supported consumption, alleviated the shortage of skilled workers, and raised the overall growth potential of the economy, which helped Spain achieve some of the strongest productivity gains among the largest European economies in recent years.”
In its weekly report, Qatar National Bank noted that supportive investment and energy dynamics have strengthened the recovery path, explaining that Spain is one of the most prominent beneficiaries of the European recovery program in the post-pandemic phase, which directs significant funding towards investment and modernization in various sectors of the economy.
He added that the country’s large investment in renewable energy and its limited reliance on imported gas contributed to protecting it from the repercussions of the recent energy price shocks that burdened its neighbors who are more dependent on energy imports. The improvement in the financial positions of families and companies, after years of reducing debt, also contributed to supporting strong domestic demand, while keeping public finances on a path of gradual improvement, in light of the current decline in the debt ratio.