Spanish growth revised to 2.6 percent amid 3.9 percent inflation
Banco de España Director General of Economics David López Salido presented the autumn macroeconomic projections on October 9, 2026, lifting 2026 GDP growth to 2.6 percent while raising headline inflation to 3.9 percent due to persistent energy price pressures.
Domestic demand lifts output outlook
Spain’s economic expansion is projected to reach 2.6 percent in 2026, marking a 0.3 percentage point upward revision from the June forecast.
Growth is propelled by robust private consumption at 3.0 percent and exports expanding by 2.4 percent.
For 2027, output is projected to grow by 2.2 percent, upgraded by 0.5 percentage points on stronger residential investment.
However, persistent energy disruptions stemming from the Middle East conflict have worsened the price path.
Headline inflation is projected to average 3.9 percent in 2026 and 3.7 percent in 2027, compared to the 2.6 percent previously expected.
In September 2026, annual inflation accelerated to 5.0 percent as energy prices rose 22.0 percent.
Subsidies soften prices at fiscal cost
Government energy relief packages totaling 0.52 percent of GDP curb 2026 inflation by 0.2 percentage points, but push the projected budget deficit to 2.6 percent of GDP.
Furthermore, Spain’s retail electricity market accelerates pass-through: with 27.5 percent of consumers on the indexed PVPC tariff, wholesale gas increases translate rapidly into power bills.
This dynamic widened Spain’s inflation gap with the euro area to 1.22 percentage points in September, eroding export competitiveness.
Borrowing time on energy costs
Upward growth revisions cannot hide an inflation divergence that steadily erodes Spanish competitiveness.
Costly fiscal shields merely delay inevitable price adjustments while worsening the deficit trajectory.
Leaving retail power tariffs exposed to volatile gas futures ensures external shocks will repeatedly derail stability.