The Spanish government on Monday raised its economic growth forecast for 2026 to 2.6%, up from its previous estimate of 2.2%, arguing that the country’s economy is well placed to withstand the impact of the Middle East conflict and wider global uncertainty.
The revised forecast forms part of the government’s new macroeconomic framework, which will accompany the draft 2027 General State Budget and outlines expectations for economic growth above 2% through to 2029.
Economy Minister & Deputy PM Carlos Cuerpo (main image) said the stronger outlook reflected the continued momentum of the Spanish economy, adding that growth of around 0.64% was expected during the second quarter of the year.
‘We have dynamic growth, a more resilient economy capable of coping with shocks with more flexibility than in previous circumstances or occasions,’ Cuerpo told a press conference.
Spain has consistently outperformed most of its European counterparts in recent years. The European Union’s fourth-largest economy expanded by 3.5% in 2024 and 2.8% last year, driven by strong consumer spending, exports and tourism. ALSO READ: Confirmed: Spanish economy grew 2.8% in 2025, roughly double eurozone average.
Until now, the government had forecast GDP growth of 2.2% for 2026. The revised estimate now places it among the most optimistic projections issued by major national and international institutions. The Bank of Spain currently forecasts growth of 2.3% while the Independent Authority for Fiscal Responsibility (AIReF) believes expansion could reach around 2.4%. The European Commission projects growth of 2.4%, while the International Monetary Fund (IMF) has taken a more cautious view, forecasting 2.1%. ALSO READ: Bank of Spain maintains growth outlook but raises inflation forecast amid Middle East tensions.
The improved outlook comes despite concerns over the economic consequences of the conflict involving Iran. Tehran’s closure of the Strait of Hormuz in response to US-Israeli strikes triggered volatility in global energy markets and raised fears of higher inflation worldwide.
However, provisional figures released on Monday by Spain’s National Statistics Institute (INE) showed annual inflation remained unchanged at 3.2% in June for a third consecutive month, despite year-on-year increases in electricity and gas prices. ALSO READ: Spain inflation jumps to 3.3% in March as Iran war sends fuel prices higher.
In March, the government approved a five-billion-euro package to cushion the impact of rising energy costs on households and businesses. The measures included tax reductions and direct subsidies for the sectors hardest hit by the crisis. ALSO READ: Spain unveils €5bn emergency package to offset energy shock from Middle East conflict.
On Monday, the cabinet agreed to extend support for the agriculture and transport sectors, although temporary VAT (IVA) reductions on fuel are due to expire from July.
The updated macroeconomic framework also marks another step in the government’s preparations for the 2027 budget. Prime Minister Pedro Sánchez has repeatedly pledged to present new public accounts, and the Ministry of Finance has already launched the formal budget process by publishing the relevant ministerial order.
Following the summer recess, the government intends to present the draft 2027 budget to parliament. Several of its parliamentary allies, including the Basque Nationalist Party (PNV), have urged the administration to bring forward the budget and warned that failure to secure its approval could ultimately force the government to consider calling a general election.
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En un contexto de incertidumbre internacional, actualizamos al alza las previsiones económicas: elevamos 4 décimas el crecimiento de 2026, del 2,2% al 2,6%, y una décima el de 2027, hasta 2,2%.
Prevemos que la economía española mantendrá un crecimiento superior al 2% hasta 2029. pic.twitter.com/uaP7yVyZ1E
— Carlos Cuerpo (@carlos_cuerpo) June 29, 2026
El nuevo cuadro macro es el 1er paso hacia los Presupuestos 2027.
✅Cuenta con el aval de la @AIReF_es, que sitúa sus previsiones en línea con las nuestras pic.twitter.com/AGICO19VGu
— Carlos Cuerpo (@carlos_cuerpo) June 29, 2026
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