Spain 2026 growth forecast raised to 2.6%

The Bank of Spain raised its 2026 growth forecast to 2.6% on Friday, citing resilient household spending as the country heads towards a snap general election on November 29.

The central bank's new forecast is up from 2.3% in June. It expects growth to slow to 2.2% in 2027 as household consumption loses momentum over the coming quarters.

The bank also raised its 2026 inflation forecast to 3.9% from 3.6% and said the outlook in coming months would depend heavily on the global energy shock. It said the Middle East conflict and intensified hostilities in recent weeks were keeping the global economy in uncertainty and volatility.

Spain's inflation rate accelerated to 4.9% in September, the highest since February 2023, according to national statistics office INE. The government has extended support for households and businesses until the end of the year.

Cost-of-living concerns are expected to be a key issue in the campaign, alongside a housing crisis that has fuelled protests. The election had been due in 2027, but Prime Minister Pedro Sanchez brought it forward after his minority government failed to pass housing measures proposed in response to the protests.