How have PSOE-led governments performed on key issues like economy, healthcare, and housing since taking office?
Executive summary
PSOE-led governments under Pedro Sánchez have overseen a period of strong headline growth, falling unemployment, and fiscal improvement while prioritizing social spending, public health recovery and an active housing agenda; critics point to lingering productivity weaknesses, high household savings and uneven regional implementation of housing rules that temper the wins [1][2][3][4]. Health spending and pandemic-era reforms strengthened public coverage and financial protection, but capacity and productivity challenges in the health system persist as central policy issues [5][6]. Housing has become an explicit political priority with rising public construction and regulatory intervention, yet rents and affordability pressures remain elevated in many provinces and outcomes depend on contested regional roll‑outs of national law [2]Spain" target="_blank" rel="noopener noreferrer">[7].
1. Economic performance: rebound, resilience and the productivity caveat
Spain under PSOE recovered from a steep COVID contraction and has been singled out for strong growth momentum — the IMF revised Spain’s 2025 growth outlook upward and described the country as emerging from pandemic and energy shocks with a “strong and balanced” performance [1]; national data and government statements point to record employment and a return to pre‑crisis wage gains, including a 61% minimum wage rise since 2018 that has reduced wage inequality [1][2]. Independent risk analysts note private domestic demand and higher real disposable incomes are driving consumption, though households are saving more than before the pandemic, suggesting cautious private spending [4]. European and Spanish research flags a persistent structural weakness: productivity growth lags the EU and remains the single largest constraint on long‑term living‑standards gains, tempering claims of a full economic turnaround [3][8].
2. Public finances and macro risks: improving ratios but external exposures remain
Eurozone forecasts project a falling debt‑to‑GDP ratio this cycle as nominal GDP growth outpaces debt servicing, with the debt ratio expected to approach or fall below 100% in 2025–26 — a material fiscal improvement from the crisis years [9]. Yet outside observers caution Spain’s trade balance and energy dependence are structural vulnerabilities that the government must manage, even as energy bills have eased since 2022 [4]. Political fragility and the need to balance social priorities with fiscal consolidation remain an implicit tension in PSOE policymaking [8][4].
3. Healthcare: more spending, stronger protection, and remaining capacity questions
Public health spending rose markedly after the pandemic and public expenditure accounted for over 70% of health spending by 2021, reflecting record health budgets and reforms to co‑payments that strengthened financial protection [5][10]. The European Observatory’s 2024 review highlights an updated governance and financing framework and credits the system with a comprehensive benefits package and reduced risk of catastrophic out‑of‑pocket spending [6][5]. Nonetheless, the literature points to service capacity, workforce and efficiency challenges that require further reform if increased funding is to translate consistently into better access and outcomes across regions [5][6].
4. Housing policy: active state intervention, rising social supply, but uneven local impact
Housing has been elevated as a top policy priority: the central government reports a recent 8% rise in social housing units, a 13% uptick in new construction, a PERTE industrialisation fund and plans to triple public housing investment over the next five years — concrete measures aimed at supply and affordability [2]. The government also cites rent reductions of up to 9% in areas where its Housing Law is applied [2]. Critics and market commentators warn that regulatory intervention, taxation changes and uneven regional adoption could have unintended effects on supply, investment and local rental markets, and long‑standing rent inflation in large cities remains a structural challenge [11][7].
5. Political economy and outlook: distributional wins, implementation hurdles
PSOE’s strategy combines redistribution (minimum wage, social income schemes) and active industrial and housing policies that have delivered measurable social gains and contributed to the party’s electoral resilience [1][12]. However, analysts stress the importance of implementation: regional cooperation is required to scale housing reforms, productivity shortfalls must be addressed to sustain fiscal gains, and global headwinds — from trade tensions to tourism volatility — pose upside and downside risks to an otherwise favorable near‑term outlook [2][3][4]. Reporting reviewed here does not provide a full micro‑level assessment of health‑system wait times or local housing market displacements, which remain areas for further investigation [5][7].