Expectations on the performance of the Spanish economy continue to improve thanks to the strength of domestic consumption and investments. The Government has raised its growth forecast for 2025 to 2.9%, two tenths above the previous forecast. This was announced by the Minister of Economy, Carlos Body, in the press conference at the end of the Council of Ministers on Tuesday, in which he presented the updated economic projections.
This is the third review undertaken by the Executive this year. In February it raised its GDP growth forecast by two tenths, to 2.6%, and in September it raised them again, this time by a tenth, to 2.7%. The government thus aligns itself with the data used by organizations such as the International Monetary Fund and the European Commission (2.9%) and remains slightly below entities such as BBVA Research and the Council of Economists, both with expectations of an improvement in the economy of 3%.
The most recent data already suggested this movement. At the end of September, the National Institute of Statistics (INE) revised upwards the second quarter’s GDP, which finally grew by 0.8% between April and June, a tenth more than expected, thus confirming that Spain has managed to avoid one of the most turbulent quarters of recent times, the one that began with Donald Trump waving the tariff tables in the air. In the third, however, the progress was more limited, 0.6%, a slight slowdown that has not yet broken the positive streak of nine consecutive quarters in growth of at least six tenths.
Spain’s exposure to the United States is lower than that of its European partners, which has helped cushion the geopolitical blow, although the foreign sector is preventing the business from performing even better. On the other hand, the increase in household consumption, in a context of demographic boom that has seen the population grow by one million people in just two years – barring any surprises, Spain will exceed 50 million inhabitants in 2026 -, record employment and a drop in unemployment to levels not seen for almost two decades, are supporting the macro data, and bringing Spain to the throne of the advanced economy which is growing fastest for the second consecutive year.
The Government also announced an increase in the spending ceiling for the 2026 accounts, up to the record figure of 212,026 million euros, 8.5% more than the previous year. If we take into account the 4,151 million provided in European funds, this figure increases even more, reaching 216,177 million.
As regards the deficit, the Public Administrations as a whole must achieve objectives of 2.1% in 2026, 1.8% in 2027 and 1.6% in 2028. This year the objective is for the red numbers to be at 2.5%, so these will moderate in the coming years if the marked path is followed. The majority will be assumed by the Central Administration (1.8%) and the rest will be distributed between Social Security (0.2%) and the Communities (0.1%).
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