Italy and Spain are two of the biggest beneficiaries of Next Generation EU, with approximately €194bn allocated to Italy and €100bn to Spain, equivalent to 11% and 8% of their respective 2019 GDP figures.
According to analysis by research and advisory firm Prometeia, despite sharing this common foundation, the two economies have followed strikingly different macroeconomic paths since 2020, with Spain recording considerably stronger growth.
Between the fourth quarter of 2019 and the fourth quarter of 2025, GDP grew by 7.1% in Italy and 10.6% in Spain, a performance that also surpassed the euro area average of 6.8%. Prometeia’s research shows the divergence became even more pronounced following the recovery to pre-pandemic levels. Between the second quarter of 2022 and the fourth quarter of 2025, cumulative growth reached 10.2% in Spain compared to just 2.2% in Italy. This gap holds even when accounting for differing population dynamics, with per capita GDP growth standing at 6.5% in Spain versus 2.5% in Italy.
On the demand side, Prometeia notes that Spain’s stronger performance is underpinned by a more robust expansion of general government spending, up 18.6% compared to 7.3% in Italy, largely driven by growth in public sector employment.
Spain also recorded stronger growth in investment in intangible assets, up 40% versus 23% in Italy, which now account for 42% of total investment in Spain, roughly 10 percentage points more than in Italy.
A more dynamic contribution from service exports, supported by both tourism and technology services, further bolstered Spain’s position. In Italy, by contrast, construction investment played a more significant role, acting as a major driver in both the residential sector and, more recently, the non-residential sector, supported by allocations under the National Recovery and Resilience Plan (NRRP).
The differing structures of the two countries’ NRRPs are reflected in the divergent trajectories of their demand components. As Prometeia highlights, Italy concentrated resources primarily in the construction sector, whereas Spain prioritised initiatives related to digitalisation, innovation, and the energy transition, with support for SMEs strongly oriented towards high-tech investments. Assessments by the European Commission point to a more pronounced sectoral impact in Spain within digital industries.
When examining the overall effects on growth, Prometeia finds that the direct contribution of the two Plans appears to favour Italy by approximately 0.2 percentage points, consistent with the differing scale of ex-ante allocations. On the whole, therefore, the growth gap between the two countries does not appear to be explained by the direct impact of the NRRP alone.
For more insights, read the full story here.
Copyright © 2026 FinTech Global
