Spain: Growth forecast to slow below 2% in 2027 – Commerzbank

Spain’s GDP is expected to expand by 2.6% in 2026, substantially outpacing other euro area economies, according to an analysis by Commerzbank’s Dr. Vincent Stamer. He links this strength to higher potential growth supported by immigration and labour market reforms. However, he cautions that these favourable forces are reaching their peak, while political and bond-market risks are likely to bring growth below 2% next year.

Economic momentum appears to be reaching its peak

"Spain’s economy has been growing at an average rate of just under 3% per year since 2023 and is on track for 2.6% growth this year as well. This means that economic output in Spain has risen nearly three times as fast as in the euro area excluding Spain. What are the reasons for this, and what does the future hold?"

"It is highly likely that Spain’s GDP will, from now on, grow at no more than its potential rate and will not exceed it any further. Potential growth, in turn, is likely currently at its peak and will now begin to decline. The virtuous cycle of growth, falling structural unemployment, and rising productivity could slow down."

"Furthermore, the net migration is also declining relative to Spain’s steadily growing population. This dampens potential growth as measured in percentage terms, so that by 2030 it is likely to be a good one percentage point below the current level."

"Growth in Spain is expected to remain strong for the time being, but may already be weaker now than it was in the first half of this year. After strong growth of 2.6% this year, the growth rate could slip below 2% next year. Spain thus remains the star performer among the major economies of the eurozone."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)