Goldman Sachs Predicts Spain as Europe’s Fastest-Growing Economy
Goldman Sachs forecasts Spain as Europe's fastest-growing economy, driven by a dynamic service sector and immigration trends.
Key Points
- • Goldman Sachs predicts Spain's economy will grow by 1.9% in 2026 and 1.7% in 2027.
- • The service sector, particularly high-value-added areas, is pivotal for growth.
- • Spain is welcoming a significant influx of educated immigrants.
- • Despite political instability, Spain's fiscal outlook remains strong with a projected deficit of 2.6% of GDP.
Goldman Sachs has unveiled a robust economic forecast for Spain, designating it as the fastest-growing economy in Europe as it emerges from the pandemic. The bank has adjusted its growth projections for Spain to 1.9% in 2026 and 1.7% in 2027, up from previous forecasts of 1.5% and 1.6%, respectively. This growth is attributed to a dynamic service sector that encompasses high-value-added areas such as finance, real estate, information technology, and professional services.
Despite experiencing the most severe economic downturn in the European Union during the pandemic, Spain has managed a remarkable recovery, showcasing significant strength in sectors beyond traditional tourism. Furthermore, the influx of educated immigrants is poised to enhance productivity and economic resilience, with Spain welcoming a greater proportion of such immigrants compared to Germany, France, and Italy.
Goldman Sachs points out that this trend in immigration is a crucial driver of economic growth, particularly as the country stands to benefit from the skills and talents these individuals bring. Analysts of the bank suggest that Spain is also in a favorable position regarding potential tariffs and that the political instability present within the country has not adversely affected its fiscal outlook. Moreover, the report highlights Spain's fiscal deficit projections, which estimate a stable deficit of 2.6% of GDP for both 2026 and 2027, indicating a solid fiscal foundation even amidst political uncertainties.
The looming increase in defense spending further signifies a proactive fiscal strategy that could provide additional stimulus to the economy. Spain’s favorable low tax and spending levels, relative to its counterparts in Europe, position it well for sustained growth in the coming years. Goldman Sachs’ forecast emphasizes the versatile potential of Spain's economy as it continues to navigate the post-pandemic recovery phase and solidify its role as an economic leader in the Eurozone.