Non-compete and related clauses are fairly common in Spain. According to employers, between 17% and 25% of private-sector employees are currently bound by a non-compete clause compared to an average of 20% to 30% across the OECD countries covered by the survey. Results from the employee survey confirm a high prevalence: 11% of workers report being bound by a non-compete clause, with an additional 19% who believe they “probably” are, compared to an average of 15% and 21% across the OECD countries covered by the survey.

Economic growth remains robust but is projected to moderate from 2.8% in 2025 to 2.2% in 2026 and 1.7% in 2027. Growth will continue to be driven by domestic demand, with private consumption supported by robust employment gains and investment benefiting from EU-funded projects. Net exports will weigh on activity due to solid import growth and more moderate external demand. Inflation will rise temporarily to around 3.3% in 2026, reflecting higher energy prices, before declining to 2.9% in 2027 as energy effects fade. Risks are tilted to the downside, largely due to external factors.

Fiscal policy is expected to remain broadly neutral in 2026 and become more restrictive in 2027. Government measures to mitigate the impact of higher energy prices are expected to cushion the slowdown in activity and partially dampen inflationary pressures. These measures should be better targeted at vulnerable social groups and temporary to cushion the social impact of higher energy prices while limiting fiscal costs. Securing Spain’s fiscal consolidation path while rebuilding fiscal buffers ahead of rising ageing-related spending should remain a priority. To fully harness the expansion of renewable electricity generation, Spain should continue to invest in grid infrastructure, interconnections and storage capacity.

Spain’s income gap with the most advanced OECD economies has recently narrowed, supported by resilient and steady GDP growth in the last years. Productivity growth, while still moderate, has improved and overall investment strengthened in recent years after a decade of weakness. Labour market performance has also advanced significantly, with declining yet still high unemployment rates. Significant reforms in recent years had led to strong job creation, even though employment rates remain well below those of peer countries.

Spain has shown a positive performance in hourly labour productivity since 2022, along with strong job creation, yet it still maintains a significant gap with the Euro Area and top OECD countries. Higher productivity growth and addressing population ageing require a flexible labour market and a dynamic business sector. Higher investment in research and development could accelerate innovation and productivity gains. Promoting a flexible and targeted adult learning system would help early school leavers and adults improve their skills and expand their employment options. Broadening the VAT tax base and reducing high marginal effective tax rates for low-income earners can make the system more efficient and improve incentives to work.