Spanish Government Raises 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 on Tuesday, as the country’s economy outpaces its euro zone peers.

The government has increased its projections for both years by 0.2 percentage points, Cuerpo stated in a news conference.

“The factors that will drive the growth of GDP in 2025 and 2026 will be private consumption and investment,” he said.

Additionally, the government anticipates a gradual decline in the unemployment rate, reaching 9.7% in 2026, down from 12.2% in 2023.

Cuerpo also mentioned on Monday that the government raised its economic growth forecast for the current year to 2.7%, previously set at 2.4%.

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

These forecast upgrades follow a general revision for the 2021-2023 period released by the Spanish statistics department (INE) last week, which reported the size of the Spanish economy at 1.5 trillion euros (approximately $1.67 trillion) in 2023 and upwardly revised the annual growth for 2023 to 2.7% from 2.5%.

With this revision, Spain’s economy continues to widen the gap with the rest of the euro zone, which is expected to grow only 0.8% this year according to European Commission data. Spain’s central bank predicts 2.8% growth for this year and a quarterly 0.6% expansion in the third quarter.