Spain raises 2026 GDP growth forecast to 2.6% and sees above-2% expansion through 2029

Revised growth forecast

The Spanish government has raised its 2026 GDP growth projection to 2.6%, an increase of four tenths from the 2.2% estimate set last November. The Council of Ministers approved the updated macroeconomic framework on Monday, marking the first formal step toward drafting the 2027 General State Budget. The government also expects the economy to expand by more than 2% annually in each of the following three years, through 2029.

Budget process kicks off

The macroeconomic table serves as the foundation for the public accounts. In the coming weeks, the government will negotiate the spending ceiling and budget stability targets with Spain's autonomous communities at the Fiscal and Financial Policy Council. The budget bill itself will then be presented to parliament, though the minority government faces a difficult path to secure enough votes.

Political headwinds

Opposition groups in the Cortes Generales have already dismissed the budget announcement. They have called it a "pre-election campaign announcement" and a "way to distract citizens," and have repeatedly demanded early general elections.

It is a pre-election campaign announcement and a way to distract citizens.

External forecasts more cautious

The government's 2.6% projection stands above estimates from major institutions. The Bank of Spain forecasts 2.3% growth for 2026, while the International Monetary Fund expects 2.1%. The government argues that strong early-year data and positive second-quarter indicators support its more optimistic outlook, despite the drag from higher energy prices and the war in the Middle East.