The Banco de España on 9 October 2026 in Madrid has presented its updated projections. In its baseline scenario, the central bank expects real gross domestic product growth of 2.6% in 2026. At the same time, it forecasts an annual average of 3.9% for the Harmonised Index of Consumer Prices (HICP) . For 2027, the Banco de España expects growth of 2.2% and average inflation of 3.7%. The projections are based on data available as at 24 September 2026.
According to the central bank, the new assumptions mainly reflect higher energy prices and higher yields in bond markets. Compared with the June round, inflation paths have been revised upwards and growth assumptions for 2026 have been raised slightly. The Banco de España stresses that price growth remains well above the medium-term target. At the same time, the impact of energy and food components, which weighed more heavily in previous months, is expected to ease partly over 2027, provided the underlying markets stabilise.
On the demand side, the central bank expects domestic demand to moderate. Net exports are likely to be affected by fluctuating imports and continued, though not accelerating, foreign demand. Fiscal factors, including previously approved measures to cushion high energy prices, provided short-term support; their gradual withdrawal will dampen inflation over 2027, but will also weaken the support they provide to growth.
The Banco de España emphasises the uncertainty surrounding its projections and sets out alternative scenarios in which growth and inflation differ significantly depending on the path of energy prices and global financing conditions. In less favourable scenarios, inflation could temporarily be higher and growth weaker. Conversely, lower energy prices and financing costs would bring inflation down faster and support activity.
The updated forecast places Spain in an environment of solid growth in 2026, albeit one accompanied by risks. Energy prices, financing conditions and the direction of fiscal policy will remain decisive for developments in the coming quarters. The Banco de España will adjust its assumptions in the next few quarters in response to new data and market movements.
Editor: Mira Cadena (Article created with AI assistance).