CaixaBank Research Raises Spain’s Economic Growth Forecast to 2.9% for 2025

CaixaBank Research has updated its economic growth projections for Spain, increasing the forecast for 2025 to 2.9% from an earlier estimate of 2.4%, and revising the 2026 forecast up to 2.1% from 2%. This upward revision reflects the resilience of the Spanish economy despite adverse international conditions, supported by factors such as lower European Central Bank (ECB) interest rates, falling energy prices, and relatively high migration flows. The report also highlights that recent growth figures have been revised upwards by Spain's National Statistics Institute (INE).

However, CaixaBank cautions that growth will moderate due to the normalization of tourism, reduced public spending, and slowing migration. Inflation is projected to end 2025 at 2.5%, averaging 2% in 2026, aligning with the ECB’s target thanks to the removal of the VAT normalization effect on electricity and easing food price inflation. Energy prices are expected to stabilize, with Brent crude oil predicted to fall to $65 per barrel by December and European natural gas prices remaining steady around €35 per MWh.

The report observes a heterogeneous growth environment within the eurozone, noting Spain’s economic dynamism contrasts with challenges faced by Germany’s industry and France’s financial sector. It also mentions that the ECB expects to maintain interest rates near current levels. Furthermore, the U.S. Federal Reserve has resumed interest rate cuts following slower job growth and moderate tariff impacts on inflation.

Overall, the updated forecasts underscore Spain’s economic strength amid global uncertainties, with favorable monetary and energy conditions supporting continued expansion through 2026.