BBVA Research

BBVA Research forecasts growth of 2.6% in 2026 and 2.1% in 2027. Extending the business-cycle decomposition through end-2026 points to a slowing expansion: demand and credit offset supply-side constraints, while weak productivity limits convergence with the EU8.

Mexico's construction sector shows a recovery in 1H26, driven by civil works and building. Despite high costs and limited credit, a positive trend is expected. The housing market is stabilizing, although affordability remains the main challenge, marked by significant regional imbalances.

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%.

The Turkish economy grew by 2.3% y/y in 2Q26, below both our expectation (3%) and market consensus (2.9%), bringing growth in 1H26 to 2.5% y/y. Assuming a prudent policy mix going forward and no further escalation in geopolitical tensions, we maintain our 3.0% GDP growth forecast for 2026 with limited downside risks now.