The Bank of Spain expects more inflation in 2026 and 2027
The organization increases its forecasts on prices, but also on the growth of the Spanish economy
Barcelona / MadridThe Bank of Spain has increased its inflation forecasts, which it places for this year and 2027 well above the targets set by the European Central Bank (ECB). The monetary body has presented its quarterly report of macroeconomic forecasts, in which it also raises the growth projections for the Spanish economy.
Specifically, the Bank of Spain expects that in 2026 the State will close the year with an increase in consumer goods and services prices of 3.9%, almost double the 2% that the ECB sets as a medium and long-term target. This figure represents an increase of three tenths compared to the institution's latest forecasts.
However, the significant upward revision has occurred in inflation for next year, which the Bank of Spain (BdE) has increased by 1.1 percentage points, to 3.7%.
The impact of the measures
The Spanish government has extended until the end of the year the package of measures in response to the crisis in the Middle East to face the economic shock. These measures have helped to contain inflation –they include generalized reductions in energy taxes and direct aid to the most affected sectors–, but they have also pushed the public deficit upwards, the Bank of Spain warns, due to their cost. In this way, the entity revises upwards (to 2.6% of GDP) the public deficit for 2026, in line with what is foreseen by the Fiscal Authority (Airef).
The study warns that "the trajectory of inflation in the coming months is highly conditioned by the evolution of the energy shock". In this sense, the institution led by José Luis Escrivá points out as the main reason for the sharp price increases "the acceleration of energy prices", mainly due to "the increase in gas prices internationally, which has caused electricity to become more expensive in the wholesale market". In fact, "the inflation projection for 2026 is in line with the adverse scenario of last March", they warn from the Bank of Spain.
Wages below inflation
While inflation may reach 4% on average this 2026, wages have grown below that and are expected to continue doing so in 2027. Specifically, the average wage increase in revised agreements, which affect about 3.1 million workers, would stand at 3.2%. The same applies to the 2026 revised agreements, in which salary increases grow by an average of 2.9%. In contrast, in new agreements signed up to August 2026 (data has been collected up to this month), the upward salary revision is 3.7%.
More growth
Despite the bad news regarding the expected evolution of prices, the Bank of Spain points to growth in economic activity in the country and a reduction in unemployment. "We cannot think that without this [the conflict] we would have grown more. In principle yes, but what is relevant is that we expected growth like the one we have [...]. This shows that we have a productive structure from the point of view of families and businesses that resists better", pointed out the Director General of Economics of the BdE, David López Salido, during the presentation of the report this Friday
Thus, the gross domestic product (GDP, the indicator that measures the size of an economy) will expand by 2.6% this year –the same figure as in 2025– and 2.2% in 2027, an upward revision of 0.3 and 0.5 percentage points, respectively. "Despite the complex international context and the rising cost of energy, the Spanish economy maintains notable dynamism in 2026, supported by the strength of private consumption, job creation, and population growth", the report indicates.
The Bank of Spain attributes the improvement to private consumption by families, which will remain "resilient until the end of 2026". Also to the export of products, goods, and services, which places Spain in a trade surplus. The export levels are explained above all by the services sector, not only tourism, indicates the Bank of Spain, but also other activities that remain "constant". For example, consulting. "The resilience of global activity and the dynamism of services lead to an upward revision of the external sector", says the forecast report published this Friday.
The good performance of the economy will mean, in parallel, that the labor market improves and the unemployment rate will go from the 10.5% officially registered last year to 10% this 2026, according to the Bank of Spain's forecasts. By 2027, unemployment will be 9.7% according to the monetary entity's projections.