What will be the increase in GDP of the budget project that the Government says it will present?

Spain has grown 3.5% in 2024, according to the INE, with an average growth in the euro zone of 0.9%; and it will grow above 3% in 2025, with growth prospects for that eurozone less than 1.5%.What is the most realistic forecast for 2026?

Let’s wait to see the macroeconomic picture that supports the budget project that the Government wants to present before the end of the year for 2026.

With this GDP growth in 2024/2025, the logic of prudence will almost certainly mean that the Government will propose a growth of 2.6/2.7% or less for 2026. But What can be expected with current data for 2026 is similar to that of 2025 (>3%), with a reservation derived from Europe.

There is no reason to doubt that the Spanish economy will go wrong in 2025 for internal reasons.

Public consumption will rise, whether there are budgets or not

Salaries remain contained, they will rise due to inflation (3% this month). Retirees (over 10 million) will see their pensions increased for the same reason. Domestic consumption may falter, but not by much. There will be money to spend. With price inflation and contained wages, business profits will grow.

Public consumption will rise, whether there are budgets or not. With these GDP growth, tax collection increases for all concepts: IRPF, VAT, corporations, special taxes,…

Consequently, Public Administrations will have liquidity and with elections ahead…

We may have reached the ceiling at the tourist reception. Our capacity is beginning to be at its limit. One fact is the continuous murmur of complaints from citizens of receiving territories about the problems caused by visitors.

Among them the high cost of housing. However, Even if the same ones come, or a little less, with an inflation of 3% they will spend more.

Barring a cataclysm in central Europe (Germany, France,…) in 2026, Spanish GDP growth can be expected to be close to 3% or more

There is a dark cloud in this tourism sector: the lower growth of Germany (in recession?) and the political problems of France may disturb the influx of its citizens to Spain.

It is not certain, although it is a possibility, despite the fact that holidays in the sun have become a consumption that they do not want to do without. Many already have their second residence here.

Exports continue to perform well (in 2024 it grew 2.7% and until June of this year 2.4% year-on-year). But the weakness of some European economies, our main buyers, may make it difficult. An example: fresh agricultural products. While it is true that they are already part of their diet, it is difficult for them to do without them if they want a healthy diet.

Our professional services sector is doing well; We sell engineering, consulting, legal, new technologies, health,… inside and outside the country; including the university sector (the Government’s mistake in attacking private universities!).

As if that were not enough, European funds (Next Generation) will continue to arrive and inject liquidity into the country. This pushes gross capital investment, which grows 1.6% in this second half of the year.

It is possible that Foreign investment contributes less to growth than in previous years. In 2024 it grew 15% compared to the previous year. But in 2025 it has had a significant setback. Perhaps due to the weakness of the Central European economy and the effect of Trump’s tariff increase that attracts investment to the US.

That foreign investment may remain weak in 2026. But it will continue to arrive. Of course, in real estate issues; also in some manufacturing industries (the Volkswagen factory continues in Sagunto); and, above all, in knowledge industries and new technologies with remote work systems from areas with a high quality of life (Málaga is an example).

In summary, barring a cataclysm in central Europe (Germany, France,…) in 2026, Spanish GDP growth of close to 3% or more can already be predicted. We will see what that draft budget project says that the Government assures that it will present.

** JR Pin Arboledas is a professor at IESE.