Growth in the Spanish economy remains solid at the start of 2026, although it is showing signs of moderating in a more uncertain international environment. Domestic demand – underpinned by private consumption and investment – remains the main driver of economic activity, buoyed by a labour market that remains dynamic and by the impetus of public policies. At the same time, the external sector is making a more limited contribution, against a backdrop of weak global trade, despite the resilience of the services sector. The combination of moderately rising labour costs, sluggish productivity and targeted fiscal support is helping to stabilise growth in the short term, whilst revealing potential vulnerabilities. The economy is thus entering the coming quarters with robust fundamentals, but with increased dependence on domestic dynamics and greater vulnerability to changes in the geopolitical landscape.