Briefing
Banco Bilbao Vizcaya Argentaria Research has raised its forecast in its report “Situación España”, published on 7 October 2026, for gross domestic product Spain’s GDP in 2026 to 2.6 per cent. This is two tenths of a percentage point above its previous estimate from June. The institute has left its forecast for 2027 unchanged at 2.1 per cent.
According to BBVA Research , the upward revision is based above all on strong domestic demand: employment is rising, while real wages and disposable income are supporting private consumption. The report again identifies services and tourism as key sectors. At the same time, the institute highlights the risks and stresses that the current improvement is fragile.
The analysis centre identifies higher prices for oil and gas, the consequences of the military escalation in the Middle East and the resulting volatility in energy markets as the main external risks. This could keep Inflation at a higher level for longer and dampen consumption and investment. BBVA Research expects average annual inflation of 3.6 per cent in 2026 and 3.2 per cent in 2027.
The report also discusses the impact of interest rates: continued tight monetary policy by the European Central Bank increases borrowing costs for businesses and households and could slow growth over the next two-year period. Added to this is heightened political uncertainty in Spain both domestically and internationally, making investment decisions more difficult.
The analysis clearly distinguishes between the current picture and downside risks: in the short term, domestic economic activity supports the upward revision; in the medium term, energy prices, persistent inflation and higher interest rates could weaken growth. BBVA Research recommends continuing to monitor the situation closely and tailoring policy measures to provide flexible, targeted support in order to limit negative second-round effects.
Editor: Daniel Mayer (Article created with AI assistance).