BBVA Research has revised upward the growth forecast for Spain’s Gross Domestic Product (GDP) in both 2025 and 2026 to 3% and 2.3%, respectively, compared to the 2.5% and 1.7% estimated in June.
Behind this improvement is the resilience of economic activity, particularly exports of goods, in a context that was expected to be unfavorable. Furthermore, the global situation improves moderately, and the review of the Quarterly National Accounting series by the National Institute of Statistics (INE) shows a greater role for investment in the recovery.
According to the latest ‘Spain Situation’ report by BBVA Research, in general The future scenario continues to be one of strength in domestic demand, although with an increasingly negative contribution from external demand.as the momentum of service exports runs out.
Public policies, key
According to BBVA Research, public policies, both monetary and fiscal, will contribute to the growth of investment and private consumption.
Interest rates have consolidated a sharp fall since they peaked a couple of years ago and, although they are not expected to continue decreasing, since the 12-month Euribor would be at 2.2% in December 2025 and at 2.3% in the same month of 2026, its current level is attractive to stimulate credit demand from both families and companies. This reduction in the cost of financing will allow investment to consolidate the acceleration observed in recent quarters.
Of particular importance will be the one aimed at building housing, which will increase its contribution to the growth of domestic demand. In general, credit-intensive sectors will benefit from this improved environment.
For its part, fiscal policy will continue to support growth as a consequence of the execution of aid to those affected by last year’s damage, the increase in defense spending and the possible acceleration in the execution of funds linked to the Recovery and Resilience Mechanism.
USA, source of instability
Despite everything, important risks remain on the stage. US economic policies remain a source of instability, along with uncertainty around the sustainability of progress in some key sectors and obstacles to investment, workforce and productivity growth.
“The impact of the increase in tariffs on trade with the US has been negativeor, in line with what was expected and it cannot be ruled out that it will continue to be so in the future, despite the signed agreement. This is due to the volatility that economic policy has shown in the American country and that some of the factors that allowed the effects to be mitigated during the first quarters may be exhausted,” the economists point out.
Added to this is the impact it has on exporters. the appreciation of the euro against the dollar and the consequent loss of competitiveness. Furthermore, despite the upward revision, the expected GDP growth in the eurozone remains relatively low and limits the increase in sales of goods abroad.
Containment of foreign tourism
Related to the above, the advance of foreign tourism is beginning to show signs of exhaustion due, in part, to the containment of European demand. In addition, Competitiveness gains as a result of investment in renewable energy may slow down in an environment of high regulatory uncertainty and increased costs.
The automobile sector, for its part, faces pressure from changes in household preferences, the lack of infrastructure that facilitates the transition to electric vehicles, and increased external competition.
Another big problem is that Lack of affordable housing is a bottleneck to improve the well-being of the younger population and to attract human capital. “The shortage of labor in some sectors and regions, together with the slackness of labor productivity, hampers the capacity for forward growth,” the report explains.
Finally, The reduction in the public deficit during the coming years will be contingent on the implementation of structural measures as the impact of the cycle on said imbalance is exhausted. “Political fragmentation and lack of consensus continue to negatively affect activity,” he concludes.
