The Bank of Spain has upgraded its outlook for the Spanish economy, forecasting GDP growth of 2.9% in 2025, three tenths higher than its previous estimate and in line with the government’s projections.
The improved outlook also carries over into future years, with growth now expected at 2.2% in 2026 and 1.9% in 2027.
Under this scenario, unemployment would fall below 10% on a sustained basis in 2027, something Spain has not achieved since 2008.
The revision is based on stronger-than-expected growth in the second and third quarters of 2025, an upward revision to 2024 GDP by Spain’s statistics office, and robust domestic demand.
The Bank highlights private consumption – particularly durable goods – and strong exports of non-tourism services such as finance, telecoms and transport.
The economy is expected to continue growing at a solid pace in the short term, outperforming the eurozone, before gradually slowing towards its long-term potential of around 2%.
Inflation is forecast to remain close to the European Central Bank’s 2% target, averaging 2.7% in 2025, 2.1% in 2026, and 1.9% in 2027.
While the overall outlook is positive, the Bank warns of risks linked to weaker external demand, rising wage pressures and potential financial market volatility, particularly in the technology sector.
