The Bank of Spain announced on Tuesday its expectation of a robust 2.7% economic expansion in the country this year, an increase from the previous 2.5% forecast. The growth is attributed to surging private consumption, unlike other Eurozone countries. Recent growth data and rising household income are driving factors according to the bank, with the government forecasting 2.6% growth.
Although this year's growth is expected to be slower than the 3.2% of last year, it contrasts with neighboring economies like France, Germany, and Italy, which anticipate growth rates below or near 1%. The report highlighted potential risks due to geopolitical tensions, with uncertainties impacting economic activity.
Bank of Spain's chief economist, Angel Gavilan, explained that while risks exist, no significant impact is foreseen on global GDP or the Spanish economy currently. The bank maintained its growth forecasts for 2026 and 2027 at 1.9% and 1.7%, respectively, with anticipated first-quarter growth between 0.6% and 0.7%.
Despite a decrease in job creation and population growth, unemployment rates are predicted to decline gradually between 2025 and 2027. Regarding inflation, Spain's EU-harmonized consumer inflation is expected to reach 2.5% this year due to higher energy prices. Inflation estimates remain at 1.7% for 2026 and 2.4% for 2027.