Spanish Government Increases GDP Growth Forecasts

MADRID (Reuters) – The Spanish government has raised its GDP growth forecasts for 2025 and 2026 to 2.4% and 2.2% respectively, according to Economy Minister Carlos Cuerpo.

The growth forecasts for these two years were increased by 0.2 percentage points during a news conference.

Key Growth Drivers

Cuerpo emphasized that the primary factors driving GDP growth in 2025 and 2026 will be private consumption and investment.

Unemployment Rate Expectations

The government anticipates a gradual decline in the unemployment rate, expecting it to reach 9.7% in 2026, a decrease from 12.2% in 2023.

Economic Growth for 2023

In addition, on Monday, the minister announced an increase in the economic growth forecast for this year to 2.7%, up from a previous 2.4%.

Deficit Forecast

Despite the positive growth projections, the ministry maintained its deficit forecast for this year at "close to 3% of GDP."

Revision Details

These forecast upgrades follow a recent general revision for the 2021-2023 period, released by the Spanish statistics department (INE), which adjusted the size of the Spanish economy to 1.5 trillion euros ($1.67 trillion) in 2023 and raised the annual growth for that year from 2.5% to 2.7%.

Comparison with Euro Zone

With this revision, the Spanish economy is expected to significantly outpace the rest of the euro zone, which is projected to grow only 0.8% this year according to European Commission data. Spain's central bank has more optimistic forecasts, expecting a 2.8% growth this year and a quarterly growth of 0.6% in the third quarter.