Italy and Spain, the eternal comparison. And in recent years, as many have said, the comparison has turned in favor of Madrid, despite the fact that the two countries are among the main beneficiaries of Next Generation EU, with approximately 194 billion euros allocated to Italy and 100 billion to Spain (11% and 8% of 2019 GDP respectively). Despite this common basis, since 2020 the two economies have followed significantly different macroeconomic trajectories, with Spain significantly more dynamic. This is revealed in this case by the Trending Topics study by Prometeia.
The differences between the two GDPs: Madrid is above the EU average
Between Q4 2019 and Q4 2025, GDP grew by 7.1% in Italy and by 10.6% in Spain, a performance also higher than the euro area average (6.8%). The gap widens in the phase following the recovery to pre-pandemic levels: between the second quarter of 2022 and the fourth quarter of 2025, cumulative growth was 10.2% in Spain and only 2.2% in Italy. This is confirmed even when eliminating the effect of different population dynamics: per capita GDP growth was 6.5% in Spain and only 2.5% in Italy.
Spain dominates in investments in intangible assets and exports of services
On the demand side, the better Spanish performance is driven by a more robust expansion in public administration spending (+18.6% versus +7.3% in Italy), largely due to theincrease in public sector employment, and from a strong growth in investment in intangible assets (+40% versus +23%). The latter currently represent 42% of total investments in Spain, approximately 10 percentage points more than in Italy. Added to this is a more dynamic contribution from exports of services, supported by both tourism and technological services to businesses. In Italy, however, a more significant role was played by construction investments, which have represented an important driving force both in the residential component and, more recently, in the non-residential component, supported by the investments of the PNRR.
Differences in the use of the PNRR do not explain GDP trends
The different configuration of the NRRP in the two countries was reflected in the different trajectories of demand components. In Italy, resources were more concentrated in the construction sector; in Spain, however, the allocation favored interventions related to digitalization, innovation, and the energy transition, with support for SMEs strongly oriented towards high-tech investments. The European Commission's assessments indicate, in fact, a most marked sectoral impact in Spain in the digital sectors. Looking at the overall effects on growth, the direct contribution of the two Plans appears to benefit Italy by approximately 0.2 percentage points, consistent with the different amounts of ex-ante allocations. Overall, therefore, the growth gap between the two countries does not appear to be explained by the direct impact of the PNRR.
Spain has better absorbed the post-Ukraine energy shock
A further point of divergence concerns the impact of the energy shock following the invasion of Ukraine.In Italy, household gas prices in 2025 will be approximately 48% higher than in 2019, while in Spain they have returned to pre-crisis levels. This trend has likely had a less severe impact on Spanish household consumption, contributing to the greater resilience of their economy.
In short, Spain's greater dynamism appears to be linked to a combination of factors ranging from a sharp increase in public administration spending, made possible by fewer budget constraints compared to Italy (public debt as a percentage of GDP was 100.1% at the end of 2025, 137.1% in Italy), to lower energy costs, especially for households. The PNRR has contributed to the growth of both economies, but it is not the decisive factor in explaining the gap between them. Looking ahead, the composition of investments, more oriented towards technological innovation in Spain, rather than the size of the resources deployed, lays the foundation for a greater boost to long-term growth.
