OECD raises Spain 2026 GDP growth forecast to 2.6% while warning of 3.7% inflation

Growth forecasts lifted across advanced economies

The Organisation for Economic Co-operation and Development lifted its 2026 economic growth forecast for Spain by 0.4 percentage points to 2.6%. The revision, published on 23 September 2026 in the interim Economic Outlook report titled "Surpassing Successive Shocks", positions Spain as the fastest-growing advanced economy in the euro area. The projection puts Spanish expansion well ahead of the eurozone average of 1.0% and the United States at 2.2%. In contrast, the OECD adjusted its global growth outlook upward by 0.1 percentage points to 2.9%, while G20 expansion is projected at 3.1%. The revision brings the OECD figures in line with targets set by the Spanish government, despite international headwinds from high energy costs.

Divergence across European and global markets

Performance across Europe and the G20 shows widening divergence across national economies. Germany and Italy received 0.4 percentage point increases, reaching projected growth rates of 1.1% and 0.9% for 2026. Conversely, France saw its forecast cut by 0.3 percentage points to 0.4%, reflecting ongoing domestic fiscal challenges. Beyond the European Union, the United Kingdom is projected to expand by 1.3%, Canada by 1.9%, China by 4.5%, and Russia by 0.5%. Saudi Arabia faced the sharpest reduction in the report, with output expected to contract by 1.8% following oil production cuts linked to regional warfare that began in late February when the United States and Israel attacked Iran.

Domestic demand versus external supply disruptions

The OECD identified domestic consumption and services activity as the primary driver behind European outperformance in the second quarter of 2026.

Several European economies, in particular the United Kingdom and Spain, also experienced solid growth in domestic demand in the second quarter, while a recovery in exports supported the rebound in Germany.

However, trade policy instability and export curbs continue to introduce supply disruptions. Extreme weather from the El Niño phenomenon has added upward pressure on agricultural commodities and food production across several regions.

Energy costs and persistent inflation

The upward revision in growth is accompanied by persistent price pressures across the Spanish economy. The OECD raised its 2026 headline inflation estimate for Spain by 0.4 percentage points to 3.7%, one full percentage point above the 2025 rate. Core inflation, which excludes volatile energy and unprocessed food prices, is projected at 3.4% in 2026 and 2.9% in 2027. Rising international crude oil prices and expanding refinery margins caused by Gulf shipping constraints continue to elevate transport and operational costs for businesses. Spanish consumer inflation reached 4.3% in August 2026, marking its highest reading since 2023.

Projections for 2027 and monetary policy risks

For 2027, the OECD projects Spanish GDP growth to decelerate to 1.8%, an upward adjustment of 0.1 percentage points from the June forecast. Inflation is expected to ease to 3.4% next year, which remains 0.5 percentage points higher than previous estimates. The report warned that central banks may need to maintain higher interest rates if persistent cost pressures keep inflation near 4.0%. For other euro area members in 2027, the OECD forecasts German growth at 1.1%, French growth at 0.7%, Italian growth at 0.6%, and the overall eurozone at 1.0%.