BBVA Research

GDP is expected to grow by 2.9% in both 2026 and 2027. Despite the effects that El Niño is already having on growth, private investment and non-extractive sectors will continue to support economic activity. A strong rebound is expected in 2028.

The Spanish economy will maintain solid growth of 2.6% in 2026 and 2.1% in 2027, supported by employment, consumption and services. Higher energy costs, inflation and interest rates will weigh on activity, while structural challenges to growth persist.

Argentina establishes itself as a key player in the global agricultural market, excelling in the production of soybeans, corn, wheat, and sunflower. The sector is a crucial source of foreign currency, with agricultural complexes projected to contribute 42% of the country's total exports in 2026.

We have revised our 2026 growth forecast upward to 1.4% (from 1.2% before); we anticipate that the gradual recovery of domestic demand will sustain the pace of expansion. Following a weak 2025, formal employment is beginning to improve. We expect core inflation to resume its downward trend in the second quarter of the year.

Tighter global financial conditions and persistent inflation pressures require a prudent policy mix. We expect monetary policy to stay restrictive, with historically high real rates and continued macroprudential measures, while fiscal and credit support is likely to be selective.

The Chinese economy slowed to 4.3% in Q2 2026 due to domestic risks such as a supply-demand mismatch, weak consumption, and a housing crisis. The GDP growth forecast is maintained at 4.5% for 2026 and 4.2% for 2027, and the CPI forecast is lowered to 0.8%.

Colombia’s economy will grow 2.6% in 2026, ease to 2.3% in 2027, and rebound to 3.1% in 2028. The 2027 slowdown will be temporary as growth shifts from public to private-sector support, which will strengthen in 2028. Fiscal imbalances and inflation remain the key challenges ahead.

Inflation in Peru stood at 0.07% month-on-month in August, raising the year-on-year rate to 4.4%. This increase is due to the readjustment of electricity tariffs and the rise in fuel prices. Core inflation moderated to 4.5%, but remains above the target range. Inflation is expected to remain high in the coming months.

Mexico's current account recorded a surplus of USD 8.9 billion in 2Q26, driven by a record high in the non-oil merchandise balance. In contrast, Net Foreign Direct Investment (FDI) showed an annual decrease of 11.7% during the first half of 2026.