Spain records 0.7% GDP growth in second quarter of 2026 despite Middle East energy tension

Quarterly acceleration and headline figures

The Spanish economy expanded by 0.7% in the second quarter of 2026 according to national accounting data released by the National Statistics Institute (INE) on 25 September 2026. This quarterly figure accelerates from the 0.6% pace recorded in the first quarter of the year, confirming the preliminary estimates published in July. In year-on-year terms, gross domestic product grew by 2.6%, matching the rate recorded at the close of 2025. With this result, Spain has registered twelve consecutive quarters with economic growth at or above 0.5%. The accumulated growth carry-over for 2026 reached 2.2% at the midpoint of the year, keeping the economy on track to meet the official full-year target of 2.6%.

Domestic consumption drives expansion

Internal demand formed the core driver of economic activity between April and June, contributing 1.1 percentage points to the overall quarterly increase. Household consumption rose by 1.2% quarter-on-quarter, an acceleration of nine tenths compared to the first quarter. On an annual basis, household spending grew by 3.5%, supported by steady employment levels and seasonal labor demand. Government spending through public administrations also expanded by 0.5% during the period. In addition, an extraordinary migrant regularisation process implemented during these months enabled workers to access formal employment, providing extra support for household purchasing decisions.

Spain continues to lead among the large advanced economies in a context still marked by international uncertainty.

Investment recovery and trade balance

Gross fixed capital formation expanded by 1.4% in the second quarter, rising four tenths above its first-quarter performance as European recovery funds reached projects in the real economy. Investment in intellectual property products climbed by 3%, while the construction sector registered a 1% quarterly gain. In contrast, the external sector exerted a drag on headline growth, subtracting 0.5 percentage points as imports grew alongside domestic demand. The government noted that earlier fiscal interventions, including fuel tax reductions, helped protect household income against international energy price disruptions linked to the conflict in the Middle East and transport bottlenecks in the Strait of Hormuz.

Inflation risks and future forecasts

While headline growth remained firm through June, rising crude oil prices began to accelerate consumer inflation toward the end of the summer. The Organisation for Economic Co-operation and Development (OECD) warned that Spanish inflation could approach 4% by the end of 2026, even as it maintained its 2.6% growth projection for the full year. The OECD also projected that annual GDP growth will moderate to 1.8% in 2027 under sustained price pressures. In response to the rising cost of energy, the Spanish Council of Ministers is preparing a package of support measures to address consumer price increases.

This good performance allows an accumulated growth so far this year of 2.2%, favouring the fulfilment of the government's forecast of 2.6% at the end of the year.