During the opening speech at the Conference of Presidents in Barcelona, Pedro Sánchez highlighted the "extraordinary dynamism of the Spanish economy," asserting that Spain is progressing more robustly than its European neighbors.

However, a detailed annual report from the European Commission presents a more sobering picture, identifying over twenty economic discrepancies that undermine productivity and threaten growth.

The report emphasizes the need for fiscal space to finance policies that can boost productivity, tackle high levels of child poverty, and address innovation gaps.

The sustainability risks in Spain's fiscal position are largely attributed to anticipated increases in aging-related costs and unfavorable initial levels of deficit and debt.

Housing affordability remains a critical issue, hindering social inclusion and mobility, particularly for the vulnerable and youth demographics.

Furthermore, the execution of Spain's Recovery, Transformation and Resilience Plan faces substantial challenges, with only 30% of the milestones and objectives having been met before the August 31, 2026 deadline.

Bureaucratic burdens on companies are prominently affecting the business environment.

Over 60% of Spanish companies view regulation as a significant investment impediment, far surpassing the EU average of 24.5%.

The rising volume of regulatory requirements has impacted the number of active businesses, collective productivity, and the efficiency of judicial processes.

Significant regional regulatory disparities further discourage businesses from expanding across territories, thereby limiting innovation, growth opportunities, and efficiency.

Although judicial efficiency reforms have been implemented, civil and commercial case resolutions still experience considerable delays, leading to economic inefficiencies.

Spain's innovation levels fall below the EU average, with research and development spending significantly lagging (0.84% of GDP compared to the EU average of 1.49%), highlighting a slow growth rate in private investment, which remains below the EU average (3.5% versus 4.0%).

The automotive sector, constituting 10% of Spain’s GDP, faces vulnerabilities from decreasing demand and supply chain disruptions, risking its competitive stance.

The manufacturing sector heavily depends on imports for essential raw materials needed for ecological and digital transitions, presenting challenges around sustainability and resilience.

On April 28, 2025, unprecedented electrical supply shortages impacted not only Spain and Portugal but also parts of France.

Enhancing the interconnection capacity for electricity is deemed crucial for integrating renewable energy production across the Iberian Peninsula.

The labor market continues to grapple with challenges, although unemployment rates are decreasing, they remain among the highest in the EU. Recent labor market reforms have notably reduced temporary contracts in the private sector, but such practices persist in public employment.

Young individuals still encounter considerable barriers to employment due to a mismatch between skills offered and job market demands.

High dropout rates and an insufficient level of basic skills among youth pose threats to future productivity and competitiveness.

Inadequate participation in adult continuing education limits workforce adaptability to evolving market needs, hampering overall competitiveness.

Notably, one in three children is at risk of poverty or social exclusion, significantly affecting those from migrant, Roma, and single-parent households.

The effectiveness of social protection policies remains constrained, particularly in terms of reducing poverty and income inequality, with social transfers (excluding pensions) ranking among the lowest in the EU.

Spain's healthcare system faces pressures due to labor shortages, particularly in primary care, complicating access to medical services.

Unequal distribution of health resources and increasing waiting times exacerbate these challenges.

Environmental sustainability presents further obstacles, with Spain failing to meet EU recycling targets for municipal waste in 2020 and concerns regarding future waste management efficacy.

Water management and resilience are pressing issues, as vast areas experience water stress due to agricultural, tourism, and energy demands.

Lastly, the degradation of natural ecosystems poses substantial risks to Spain's economy and competitiveness, particularly affecting sectors reliant on ecosystem services, such as agriculture and fishing.