Spain is grappling with mounting fiscal pressure stemming from record pension expenditures, which reached 14.272 billion euros in February. Simultaneously, the country is experiencing an unprecedented state of reservoir capacity for the past decade, nearing 83%. Despite optimistic water resource data, the economy shows signs of imbalance, manifested by higher inflation than in other major eurozone countries.

Record Pension Costs

Pension benefit expenditures in February 2026 reached a historic 14.272 billion euros amid a rapid increase in the number of pensioners.

High Reservoir Levels

Nationwide water resources reached 82.9% capacity, the highest level since 2014, although Catalonia still has a deficit.

Expansion of Chinese Cars

Chinese car manufacturers already control over 10% of the Spanish market, making Spain their second foothold in Europe.

Inflation Above Average

Despite inflation in the eurozone falling to 1.7%, Spain maintains higher price growth dynamics than Germany or France.

The Spanish social security system faces a formidable financial challenge. The latest data shows monthly pension benefit expenditures have risen to a record 14.272 billion euros, linked to the arrival of nearly 400,000 new beneficiaries in just one year. The average pension shows strong regional variation, reaching 1,368 euros in Castile and León, while in other autonomous communities, such as Castilla-La Mancha, the value is nearly 100 euros lower. A particularly difficult situation concerns those insured under the RETA system, whose benefits are on average 670 euros lower than in the general system. In the realm of natural resources, Spain is reporting a rare bounty. A series of weather fronts have led to national reservoirs reaching 82.9% capacity, the highest level in nearly 12 years. However, the situation is not uniform – while most of the country enjoys a water surplus, resources in the internal basins of Catalonia show a declining trend, forcing the maintenance of partial restrictions. Experts also point to the technical state of infrastructure, noting that the country has over 1,200 large dams, a significant portion of which require modernization due to age and increasing risk of extreme weather events. Historically, Spain has struggled with cyclical periods of severe drought, which prompted the state to build one of the most extensive dam networks in Europe by the mid-20th century to secure agriculture and tourism.Interesting changes are occurring in the automotive market, where the share of Chinese brands has already exceeded 10%. This phenomenon accompanies the aging of the vehicle fleet – due to rising prices of new cars, Spaniards are using their vehicles for an average of 13 years longer. In the background of these events lies the macroeconomic situation: although HICP inflation in the eurozone has fallen to 1.7%, the Spanish economy still records higher price growth dynamics than its main trading partners, weakening the competitiveness of local industry.

Mentioned People

  • Maurici Lucena — CEO of airport operator Aena, who publicly defended the company's investment policy against criticism from airlines.
  • Carlos Cuerpo — Spanish Minister of Economy, speaking about the integration of financial markets.