The Spanish government has decided to maintain its previous growth forecast for 2026, anticipating a 2.2% expansion in its gross domestic product. This decision, announced by the Economy Ministry, reflects a belief that the country's economic strength over recent years will outweigh the uncertainties brought about by the ongoing conflict involving Iran.
This stance puts the government's forecast in line with some other analysts like Airef and Funcas, who also project 2.2% growth for Spain in 2026. However, it contrasts with institutions like CaixaBank Research and the IMF, both of which have revised their 2026 GDP growth forecasts downwards to 2.1% due to the Iran conflict. Similarly, BBVA Research and the European Commission are more optimistic, forecasting 2.4% growth for Spain in 2026. The Bank of Spain and Consensus Forecasts predict 2.3% growth.
The conflict has led to higher energy price forecasts, with Brent crude expected to average $90/barrel in 2026 by CaixaBank Research, up from a previous estimate of $67/barrel. TTF gas is also projected to rise to €43/MWh from €31/MWh previously. These higher energy costs are the main reason for downward revisions in economic forecasts by some analysts. Inflation is also expected to rebound to around 3.5% in 2026, an increase of 1.1 percentage points compared to pre-conflict expectations.
Despite these external pressures, domestic demand, supported by private consumption and investment, is expected to remain the primary driver of growth in Spain. Strong services exports, including tourism, are also anticipated to contribute positively. The government has also implemented fiscal support measures, such as energy tax reductions and targeted sectoral aid, amounting to approximately €4 billion (around 0.25% of GDP), to mitigate the economic impact of the Middle East conflict.
