Spain's Economic Growth to Slow in 2026 Amid Persistent Inflation, Says S&P and Economy Minister
Spain faces a slowdown in economic growth for 2026 with inflation and unemployment challenges, yet efforts continue to sustain reforms and private consumption.
- • Spain's inflation increased by 15% in consumer basket costs compared to 2022, with food prices rising over 20%.
- • S&P forecasts Spain's economic growth to slow from 2.8% in 2025 to 2.1% in 2026 and 1.8% by 2028.
- • Unemployment in Spain is expected to remain above 10% until 2027, exceeding the Eurozone average.
- • Minister Carlos Cuerpo highlights the importance of wage adjustments to match inflation to protect purchasing power.
Key details
Recent analyses and statements from Spain's Minister of Economy, Carlos Cuerpo, together with forecasts from Standard & Poor's (S&P), paint a cautious picture of Spain's economic outlook for 2025 and 2026. While Spain has been a notable growth driver in Europe, expectations indicate a slowdown ahead, with inflation and wage pressures at the forefront.
Carlos Cuerpo emphasized the significant inflationary pressures in Spain, highlighting that the overall consumer basket cost surged by 15% compared to 2022, with food prices rising by over 20%. He stressed the need for wages to keep pace with inflation to maintain purchasing power and noted housing price increases, although these remain below the Eurozone average since 2022. Despite these challenges, Cuerpo affirmed that the government’s extension of the budget would not obstruct ongoing reforms and investments.
Meanwhile, S&P forecasts Spain’s economic growth to decelerate from 2.8% in 2025 to 2.1% in 2026, and further to 1.8% by 2027 and 2028. This downturn is linked to the tapering of European recovery funds and fading stimulus from the Next Generation EU program. Additionally, Spain's inflation rate is expected to remain elevated at 2.5% in 2025, surpassing the Eurozone average of 2.1%, and unemployment will persist above 10% until 2027, against the Eurozone average of 5.9%.
Despite this, Spain’s growth will still outpace the Eurozone average, buoyed mainly by private consumption, although consumer spending and real wage growth are projected to moderate. The ECB's forthcoming limits on monetary easing—signaled by near-end interest rate cuts—present further constraints. On a more positive note, digitalization in Europe remains a key growth factor, adding an annual 0.4% to GDP growth since 2021.
Overall, the combined insights highlight Spain’s ongoing struggle with inflation and economic moderation, balanced by government efforts to sustain reforms and infrastructure investments and Europe's broader digital transformation driving growth.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.