IMF revises Spain’s 2026 growth forecast upward to 2.5%

The International Monetary Fund (IMF) revised its economic growth forecast for Spain upward by four décimas, positioning the country to grow by 2.5% this year and lead major eurozone economies.

The global economic outlook released during the autumn meetings in Bangkok points to persistent resilience across developed nations despite ongoing inflationary pressures and high public debt. According to the IMF’s World Economic Outlook, Spain’s anticipated 2.5% expansion for 2026 outpaces the broader euro area, which the fund projects will grow by a modest 1.1%. The institution kept its 2027 growth forecast for Spain steady at 1.8%, though domestic projections from the Spanish government and the central bank remain slightly more optimistic at 2.2% for that subsequent year.

The IMF projects Spain’s average inflation for 2026 will hit 3.7%, before easing to 2.7% in 2027. Meanwhile, the Bank of Spain and domestic agencies have previously pointed to sustained gas and energy pressures keeping price indexes higher for longer. The IMF expects Spain’s unemployment rate to decline to 9.8% across 2026 and 2027, dropping below the 10.5% threshold registered in 2025, yet remaining notably higher than the broader eurozone average of 6.3%.

Diverging Trajectories Across European Markets

While Spain experiences a sustained growth momentum, other major European economies present a starkly different fiscal picture. If current projections hold, Spain will record four consecutive years of growing at more than double the pace of the European Union average. By contrast, Germany is projected to grow by 1.3% in 2026 and 1.1% in 2027. Italy expects a more subdued expansion of 0.8% this year and 0.6% the next. France faces an even sharper slowdown, with the IMF trimming its French growth expectations down to just 0.4% for 2026 before a minor recovery to 0.7% in 2027.

Worldwide, total economic output is decelerating to 3.1% for 2026—four décimas lower than 2025 figures—before a projected rebound to 3.4% in 2027.

High Public Debt Leaves Economies Vulnerable to Shocks

Public debt and fiscal deficits remain at historically high levels across multiple advanced economies. The IMF cautioned that measures deployed by governments to shield households from volatile commodity prices are frequently broad rather than targeted, leaving public balances vulnerable to external shocks.

The IMF noted that prolonged conflicts and geopolitical tensions could reignite inflationary pressures, challenge fiscal stability, and disproportionately affect energy-importing and low-income nations.