Staff from the Commission, in liaison with staff from the European Central Bank, carried out the seventh post-programme surveillance visit to Spain on 24-26 April. In 2016, economic activity expanded strongly, by 3.2%, the same rate as in the previous year and well above the euro area average. Domestic demand, and especially private consumption, remained the main driver of growth. Private sector debt reduction has progressed at a fast pace, converging to the euro area average. However, the still high level of private and public debt is reflected in a sizeable amount of external liabilities. Unemployment has decreased markedly over the past three years, thanks in part to the labour market reforms undertaken in recent years, but at 18.6% in the last quarter of 2016, it remains among the highest in the EU, especially among youth and low-skilled workers. Overall, achieving higher productivity and ensuring a balanced, durable and inclusive growth path over the long term will require further reforms and avoiding any backtracking on past reforms.