BBVA and BFF cut growth forecasts for Mexico, Spain, Peru as economies face headwinds

BFF Banking Group lowered its 2026 real GDP growth forecast for Spain to 2.2% (4.8% nominal) and raised expected inflation to 3.2%. The revision cites a shock in Middle‑Eastern geopolitics, rising energy prices and an anticipated fiscal deficit of 2.6% of GDP in 2026, with public debt slipping slightly below 100% of GDP.

BBVA reduced its 2026 growth outlook for Mexico to 1.2% from 1.8%, attributing the downgrade to weaker investment and domestic consumption. The bank notes a temporary boost of about 0.3 percentage points from the 2026 FIFA World Cup, warns of fiscal risks that could jeopardise Mexico’s investment‑grade rating, and expects a gradual recovery to around 1.8% in 2027, highlighting AI‑related export opportunities.

BBVA Research raised its 2026 growth estimate for Peru to 3.1% (up from 2.9%), citing solid private‑investment gains and a favourable political outlook, while flagging that the El Niño climate event could shave roughly 0.1 percentage point from growth.

Banco Provincia’s weekly report warned that Argentina’s real economy is weakening in 2026. Real private wages fell 5%, public wages 4.5%, and about 120,000 jobs were lost. Credit to firms and households dropped 4.5%, while the number of people in arrears rose to 6.8 million, underscoring a deepening internal demand contraction.