Spain Economic Outlook. March 2026

Summary

GDP is estimated to have grown by 2.8% in 2025, and the expansion is expected to continue, with growth of 2.4% in both 2026 and 2027. The outlook remains favourable, although structural challenges persist in a more uncertain international environment than three months ago.

Key points

• Key points:
• The outbreak of war in Iran represents a new challenge for the global economy. The baseline scenario remains a short-lived conflict with limited macroeconomic impact, albeit with higher uncertainty. Under this scenario, global growth could remain relatively dynamic, at around 3.2% in 2026–27.
• In Spain, rising geopolitical risks offset the positive surprises in recent activity data. Higher oil and gas prices could subtract around 0.2 pp from GDP in 2026 and raise average inflation by 0.3 pp.
• Non-resident consumption could benefit from geopolitical tensions. Non-tourism services exports still have room to grow above GDP. In addition, the labour force is expected to continue expanding, supported by immigration and higher participation rates.
• Domestic demand will continue to be supported by public policies. Relatively low interest rates will boost consumption and investment. Spending inertia and the absence of a new budget suggest a more expansionary fiscal stance than previously expected, potentially reinforced by additional fiscal support related to the conflict in Iran.
• In a context of heightened uncertainty and significant challenges, sustaining economic momentum will require measures that promote investment—particularly in housing and energy—support job creation, foster an appropriate migration policy, and improve productivity.

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