Spain’s 2026 Economic Backdrop: Inflation, Income, Interest Rates
If there are no unexpected shocks in Spain, 2026 will not be marked by tension in price setting. Forecasts suggest that inflation will continue to normalize, gradually converging toward the 2% target, which is expected to bring an end to several years of sharp swings.
At the same time, workers and pensioners will slightly increase their purchasing power: pensions will be recalculated in line with the consumer price index, civil servants’ salaries will rise faster than inflation, pay increases are expected in the private sector, and there will be a new increase in the minimum wage. It is also forecast that Euribor will stabilize, and there will be no sharp changes in mortgage costs—though with the caveat that housing is now more expensive than ever, and no market cooling is expected.
Utilities, Telecoms, Transport, and New-Year Uncertainties
Electricity prices will also not fall, as tariffs are set to increase, and major suppliers have already hinted at higher bills. The main telecom operators have also announced price increases for their service bundles. In transport, the discounts already in place will be maintained, and they have been gradually reduced since their introduction in 2022 to soften the impact of the inflation crisis.
In addition, there are still many unknowns. For the third year in a row, the year will begin without a new budget and without major changes in tax policy. And although the government has announced that in early 2026 it will finally present a new budget that may include new measures, everything depends on whether it can secure enough support in Congress, which at present appears to be a difficult task. The international environment is also not encouraging: a customs war could escalate at any moment, room for further interest-rate cuts is not as large as before, and geopolitical uncertainty remains high.
Housing Market: Record Sale and Rental Prices
2026 is shaping up to be the year when new records will be set for home sale and rental prices in Spain. This is because the strong performance of the real estate market in 2025, when the threshold of 700,000 purchase-and-sale transactions will be exceeded, suggests that little will change in the new year.
According to forecasts from portals such as Idealista or Fotocasa, in 2026 sale and rental prices will continue to rise—especially in areas where there are no regulatory restrictions. Transaction volume will increase over the next 12 months by 3–10%. Rent growth will fall within this range as well and, according to the latest Pisos.com study, will be around 6% due to the still-insufficient supply and steadily growing demand, to which only about 100,000 new properties will be added.
Rentals: Contract Expirations and the INE Rent Update Index
However, rentals will once again experience the greatest pressure, especially because, according to government estimates, around 600,000 contracts will expire in 2026. These are contracts signed during the pandemic, which will lead to new renegotiations and, most likely, higher rents. This increase may also affect contracts that do not expire in 2026, in line with the rent update index calculated by the INE and applied since 2025. Although the exact figure is not yet known, it is expected to be lower than the consumer price index and therefore not reach 3%.
Mortgage and Rates: Moderate Growth in Lending
As for mortgage lending dynamics, forecasts for 2026 indicate that the volume of new loans will grow by around 0.4%, so no mortgage boom is expected—only very modest growth linked to improved financing. At its latest meeting, the European Central Bank once again left interest rates unchanged and, apparently, will keep them at this level.
Income and Contributions: Pensions, Civil Servants, SMI, and Social Security
In the labor sphere, pensions, civil servants’ wages, and the minimum interprofessional wage (SMI) will rise from January. At the same time, contributions paid by companies and workers into the social security system will increase.
More than 11 million pensioners (from the social security system and civil-service pensioners) will see their pension increase in the January payroll by 2.7% (the same as the average price increase in 2025). In addition, non-contributory and minimum pensions with family responsibilities will increase by 11.4% (without responsibilities—by 7%) in order to raise these payments above the poverty threshold.
For their part, the wages of around 3.5 million civil servants at all levels will rise by 4% from January (2.5% in 2025 and the remaining 1.5% in 2026). The minimum wage (which in 2025 was €1,184 per month with 14 payments) is still being discussed by the government and its partners. However, as experts suggest, the increase will range from 3.1% if this income ultimately becomes taxable (although the Ministry of Finance will approve a relief to refund the tax paid next year), to 4.7% if it does not.
Transport: A Unified Travel Pass and the Continuation of Discounts
At the start of the year, a unified travel pass promoted by the Ministry of Transport comes into force for travel across the country on commuter rail and medium-distance trains, as well as on state-line buses. Its price is €60 per month or €30 for those under 26.
Ten-trip passes on commuter trains will remain, as will monthly passes priced at €20 and €10 for young people. Commuter rail will be free for children under 14. On medium-distance trains and Avant lines, free travel for children and 40% discounts on monthly passes and ten-trip passes will also remain. A 50% discount has been extended for the general Avant pass.
For Avant, a quarterly Pase Vía pass has been introduced, with discounts from 45% to 72%. On commuter trains, a Cronos ticket is planned with a 40% discount starting from the fifth trip when paying with a bank card at the turnstile. And on medium-distance trains, round-trip discounts increase from 7% to 20%.
For state bus transport, free travel for children under 14 remains; the ten-trip pass keeps a 40% discount; and the named monthly pass keeps a 50% discount. In transport managed by regional or local authorities, free travel for children also remains, as well as a 50% discount for young people up to 26 and a 20% discount on other passes.
Air Travel and Roads: Aena and Toll Motorways
Airfare depends on each airline, but it is expected that starting in March the state operator Aena will raise passenger fees. The average increase will be 6.44%, which means €0.67 per passenger—to €11.02.
Motorway tolls are adjusted in line with the consumer price index, but in 2026 new measures will be introduced on state-managed roads. Until 2032, annual increases will be capped at a maximum of 2% on Madrid’s toll motorways R-2, R-3, R-4, R-5 and M-12, on the AP-7 (Cartagena–Vera), AP-36 (Ocaña–La Roda) and AP-41 (Madrid–Toledo). The Alicante bypass will be free. On other motorways, toll increases of 2.61% are expected.
Taxes: No Sharp Changes, but Important Updates
No major changes are expected in taxation. Among the new measures to note next year are a reduction in corporate income tax for small and micro-enterprises and an update of coefficients used to calculate the municipal tax on capital gains, which is paid when selling real estate. There will also be changes regarding the new waste tax, which began being charged in the second half of 2025 and sparked significant backlash among taxpayers and widespread appeals.
Telecoms: Operators Raising Prices
In 2026, citing rising costs, major telecom operators will increase their tariffs, with the exception of Digi. For Movistar, the average increase will be 4%; for Vodafone España—3.9%; and for Orange—3.8%. Consumers on promotional contracts will be exempt from these increases until the end of their promotional period, or they can take advantage of the many offers operators roll out throughout the year.
Energy: Electricity, Gas, and Fuel
In 2026, no significant changes are expected in the energy supply sector (electricity, gas and fuel). Electricity has the highest likelihood of price increases, as certain factors suggest. According to official documentation available so far, some fixed costs paid monthly will rise.
The National Commission on Markets and Competition (CNMC) has already published the 2026 tariff order, which will rise by an average of 0.5%. But charges (peajes)—another major regulated cost item that consumers pay in their bills—will increase significantly. The Ministry for Ecological Transition, which is responsible for this area, has proposed an increase of more than 10%.
Nevertheless, the government is counting on a significant reduction in the energy cost component, the third-largest factor in the bill, and expects this reduction to offset the rise in fixed costs, while taxes remain unchanged. However, this contradicts forecasts by private companies, which believe that the costs of reinforcing operations after the power outage will lead to higher bills for at least 20 million consumers in the liberalized market (more than 60% of the total).
Both Iberdrola and Endesa, Spain’s two largest electricity suppliers, have announced that by 2026 they will pass on 100% of the additional costs incurred after the power outage to their customers. For this reason, some suppliers had already previously increased bills by 7%.
The main impact on gas bills will come from the cost of raw materials, which fluctuates on international markets. The International Energy Agency (IEA) indicates that by 2026 an increase in global gas supply and moderate demand growth are expected, which could ease market tension and contain prices in the region. Some investment banks—such as UBS—have recently lowered their 2026 natural gas price forecasts compared to previous years, even expecting lower levels due to excess LNG production capacity.
Something similar is happening with fuel. Prices at gas stations will largely depend on the price of oil on international markets. A number of institutions and market analysts forecast that the average price of Brent crude in 2026 will be lower than in recent years and may be around $50–60 per barrel if a global oversupply materializes. The reason lies in a combination of higher global oil production and demand that is not growing as fast as expected. Added to this is uncertainty regarding diesel taxation and its possible alignment with gasoline.
Conclusion: Inflation Will Be Moderate, but Housing Will Keep Getting More Expensive
Despite the expected increase in the cost of a number of goods and services, 2026 promises moderate inflation and a gradual normalization of prices both in Spain and across the eurozone. After several years of strong inflationary pressure, forecasts point to a strengthening disinflation process, although at different speeds across countries. In Spain, many indicators suggest that the average Consumer Price Index in 2026 will be around 2%, although core inflation remains high.
