Spain will be the fastest-growing large economy in the euro area in 2026: the International Monetary Fund expects GDP to grow 2.5% this year and 1.8% in 2027, more than double the euro average. For anyone buying or investing in property on the Costa del Sol, the figure points to solid demand, although higher inflation means financing deserves a closer look.
The new forecasts are part of the World Economic Outlook the IMF released on 13 October 2026. The Fund has raised its estimate for Spain from the spring edition and kept its 2027 figure unchanged, while it expects a slight slowdown for the planet as a whole: the world economy will grow 3.1% in 2026, down from 3.5% in 2025.
How fast will Spain grow compared with the rest of Europe?
The gap with the big euro partners is wide. Germany barely exceeds 1%, Italy and France fall short of it and the euro area as a whole will grow 1.1% this year. These are the IMF figures:
| Economy | 2025 | 2026 (forecast) | 2027 (forecast) |
|---|---|---|---|
| Spain | 2.6% | 2.5% | 1.8% |
| Euro area | 1.2% | 1.1% | 1.2% |
| Germany | 0.2% | 1.3% | 1.1% |
| France | 0.9% | 0.4% | 0.7% |
| Italy | 0.5% | 0.8% | 0.6% |
| United Kingdom | 1.2% | 1.3% | 1.2% |
| United States | 2.3% | 2.3% | 2.3% |
| World economy | 3.5% | 3.1% | 3.4% |
Real GDP growth, annual %. Source: IMF, World Economic Outlook, October 2026.
Outside Europe, Spain will also outpace the United States, the United Kingdom, Canada and Japan this year, trailing clearly only large emerging economies such as India and China.
Why does economic growth matter for the housing market?
A GDP that grows faster than its neighbours' translates, in practice, into more jobs, more disposable income and more confidence to sign a mortgage. The IMF estimates that unemployment in Spain will fall from 10.5% in 2025 to 9.8% in 2026 and 2027. It is still high by European standards, but the trend supports demand from domestic buyers.
- More jobs and better wages widen the number of households able to buy.
- The population is growing as foreign residents and workers arrive, adding pressure on a housing supply that cannot keep up.
- A dynamic economy lowers the risk perceived by investors buying assets in Spain.
What risk does 3.7% inflation pose for mortgages?
The flip side of the report is prices. The IMF expects Spanish inflation to average 3.7% in 2026, above the euro area's 3.1%, against a backdrop of higher energy costs linked to the war in the Middle East. For 2027 it expects inflation to ease to 2.7%, slightly below the 2.8% forecast for the euro area as a whole.
| Indicator | Spain 2026 | Euro area 2026 | Spain 2027 | Euro area 2027 |
|---|---|---|---|---|
| Average inflation | 3.7% | 3.1% | 2.7% | 2.8% |
| Unemployment rate | 9.8% | 6.3% | 9.8% | 6.3% |
With inflation well above the 2% target, the European Central Bank has already raised rates twice since June, to 2.5%, and stubborn prices leave it little room to cut them soon. If you are financing your purchase, it pays to compare fixed and mixed-rate offers and to work out your repayments with some headroom, in case Euribor is slow to come down.
What does this mean for the Costa del Sol?
The Malaga coast brings together two of the engines of Spanish growth: jobs linked to tourism and services, and the arrival of international buyers. Even though Germany, France and the United Kingdom are growing slowly, their citizens still see this part of Andalusia as a place to live, work remotely or invest, and that keeps prices high.
According to our Costa del Sol market report, with October 2026 data, the median asking price of homes for sale is 650,000 euros and the price per square metre stands at 4,738 euros. By municipality, the differences are significant:
| Municipality | Median price | Price per m2 | Homes analysed |
|---|---|---|---|
| Benahavís | €997,000 | €5,651/m² | 589 |
| Marbella | €950,000 | €6,096/m² | 2,038 |
| Estepona | €637,000 | €4,750/m² | 1,380 |
| Malaga | €625,000 | €4,955/m² | 366 |
| Fuengirola | €560,000 | €5,417/m² | 664 |
| Mijas | €550,000 | €4,367/m² | 1,121 |
| Manilva | €360,000 | €3,425/m² | 311 |
| Report total | €650,000 | €4,738/m2 | 8,233 |
Median asking prices, October 2026. Source: EVS PROPERTY GROUP Costa del Sol market report.
Benahavís and Marbella remain at the top end, while Manilva or Mijas offer more affordable entry points. With a growing economy, mid-priced areas tend to attract domestic buyers who need a mortgage, and the most exclusive ones attract international buyers with their own capital.
Is it a good time to invest in property on the Costa del Sol?
The IMF report is not an invitation to buy blindly, but it does strengthen the fundamentals: a growing economy, falling unemployment and a destination with steady international demand. The risks the Fund itself points to, such as an escalation of conflicts, renewed trade tensions or a reassessment of expectations around artificial intelligence, affect the whole of Europe, and Spain starts from a stronger position than its neighbours.
- Work out your yield assuming inflation of 3 or 4%, not 2%.
- Prioritise areas with demand all year round, not just in summer.
- Negotiate your mortgage with headroom and compare fixed, mixed and variable rates.
- Include purchase costs in your budget: taxes, notary and land registry fees.
In short: what does the IMF report mean for buyers?
Spain will grow more than twice as fast as the euro area in 2026, with lower unemployment but higher inflation. For the Costa del Sol market, that means sustained demand and firm prices, and the need to plan financing carefully. If you are thinking of buying or investing, at EVS PROPERTY GROUP we help you analyse each area with real data and find the property that fits your goals.
Frequently asked questions
How much will the Spanish economy grow in 2026 according to the IMF?
By 2.5%, after 2.6% in 2025, and by 1.8% in 2027. That is the strongest growth among the large euro area economies, which together will expand by 1.1% this year.
What inflation does the IMF forecast for Spain?
An average of 3.7% in 2026, above the euro area's 3.1%, easing to 2.7% in 2027.
Does economic growth affect house prices?
Indirectly, yes: more jobs and higher incomes boost demand to buy. If supply does not grow at the same pace, as is the case on the Costa del Sol, prices tend to stay firm or rise.
How much does a home cost on the Costa del Sol in October 2026?
According to our market report, the median asking price is 650,000 euros and the price per square metre is around 4,738 euros, with big differences between municipalities.
What next? The most useful thing after reading is to look at the real market: browse properties by city or tell us on WhatsApp what you are looking for — area, budget, timing — and we will prepare a tailored selection, with no obligation.
You may also find useful: sell your property invest on the Costa del Sol free valuation monthly price report
