Spain’s main analysts improve their GDP forecast to 2.9% this year, but point to a slowdown in 2026

The Funcas analyst panel, which compiles the forecasts of 19 Spanish analysis houses, has improved its growth forecasts for the Spanish economy to 2.9% in 2025. This is reflected in the latest edition of the panel, which the study center for the former savings banks published this Thursday. At the same time, analysts warn that growth will slow in 2026, when the national GDP is expected to rebound by 2.1%.

The 19 panelists have improved their own forecasts, which range between 3% in 2025 and 2.7% (the arithmetic average is 2.9%). The reasons behind the improvement in the forecast are the good GDP data in the third quarter, when the economy rebounded by 0.6% and, above all, the upward revision of the 2024 growth data that the INE undertook last September.

The panel analysts are betting because National demand (consumption and investment) will be a greater growth engine than expected. Specifically, they estimate that it will contribute 3.3 points to the increase in GDP (four tenths more than in September), while the foreign sector (imports and exports) would subtract four tenths (one more than in September).

The majority of panelists have also improved their forecasts for 2026 to an average of 2.1% and They are confident that the economy will grow at a rate of 0.5% each quarter throughout next year. Once again, next year national demand would once again be the only engine of economic growth, contributing 2.3 points to GDP (two tenths more), while exports and imports will reduce growth by two tenths.

They predict default on the deficit

In the public finances section, the Funcas panel points out that the deficit at this point in the year (discounting DANA spending) is 30% lower than in 2024. Tax revenue is growing faster than expectedwhich has led analysts to also improve their public deficit expectations. Specifically, they forecast 2.7% of the GDP this year and 2.6% next year, figures higher than those managed by the Government or the Independent Authority for Fiscal Responsibility (Airef).

In view of these figures, the panelists see it as necessary to reduce public support for the economy. The majority believes that budgets are expansive, but they should be neutral and not provide an additional boost to what the economy is already carrying due to its own inertia.

Regarding consumer prices, the consensus of analysts expects inflation to close 2026 at an average of 2.6%a decrease of two tenths compared to the 2024 figure. Next year, the expectation is that price increases will moderate to 2.1%, practically in line with the reference that the European Central Bank (ECB) considers desirable.

The analysts participating in the Funcas panel also predict a slight improvement in employment expectations. They expect employment to grow by 2.4% this year and slow down to 1.7% next year, one tenth more than the September report, respectively. Consequently, the unemployment rate would be reduced to 10.5% in 2025 and would continue to decline next year until reaching 10% (one and two tenths less, respectively, than in the previous panel).

When it comes to productivity, the panelists estimate growth of 0.5% and 0.4% in 2025 and 2026. While unit labor costs (what the labor costs necessary to produce a unit of product) are expected to be increase by 2.9 and 2.1% this year and next, respectively.

The external outlook is better than anticipated when Donald Trump’s tariff offensive began. However, panelists warn that trade uncertainty has not dissipated because trade restrictions have not been fully passed on to the economy. In addition, they warn of the risks of a technological bubble in financial markets and doubts about the sustainability of public debt.

Finally, regarding official interest rates, the panelists are betting that the ECB will maintain the official price of money around current levels (the deposit facility is now at 2%) throughout the forecast period.