Sánchez's economic strategy relies on public spending amid mounting structural risks

Under pressure from alleged corruption cases and a splintered congressional majority, President Sánchez has announced a snap election without specifying a date. The government maintains a triumphant narrative about the economy, highlighting short-term improvements in household consumption and gross fixed capital formation, even as external contributions fade. Recent INE data show slight upward movements in certain categories that merely offset larger downward trends, resulting in a flat overall picture.

This temporary boost is attributed to exponential public spending, soaring debt and implicit backing from the European Central Bank, which cannot last indefinitely. Meanwhile, tourism and a still-positive external sector have helped sustain momentum, but structural imbalances, rising taxes and declining productivity threaten long-term stability.