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[BUSINESS] · Spain · 17 sources

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Bank of Spain raises GDP growth forecasts while increasing inflation projections

The Bank of Spain has upwardly revised its economic growth forecasts for Spain, projecting a GDP increase of 2.6% in 2026 and 2.2% in 2027. This revision is driven by robust private consumption, job creation, and population growth.

However, the institution has also raised its inflation forecasts due to energy market disruptions and persistent price pressures in the services sector, particularly tourism and hospitality. Inflation is expected to reach 3.9% in 2026 and 3.7% in 2027.

To mitigate the impact of the energy crisis linked to the conflict in the Middle East, government tax cuts on electricity, gas, and fuel have provided an estimated 3,675 million euros in direct savings for households, equivalent to approximately 0.21% of GDP. These fiscal measures are estimated to cost the state 0.52% of GDP, representing about one-fifth of the projected 2026 deficit.

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Banco de España · Bank of Spain · European Monetary Union · Iran · José Luis Escrivá · Spain

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