Paris Soir - Spain raises 2026 growth forecast despite Mideast war turmoil

NYSE - LSE

CMSC	0.3%	21.995	$
RYCEF	-0.27%	18.7	$
RIO	-0.02%	93.72	$
NGG	0.56%	83.48	$
BTI	-0.84%	62.24	$
VOD	-1.5%	13.685	$
BCE	-0.66%	22.77	$
AZN	0.53%	189.42	$
GSK	-0.27%	52.36	$
BCC	-2.95%	78.7	$
JRI	0.54%	12.86	$
BP	1.18%	37.575	$
RELX	0.7%	31.56	$
CMSD	0.05%	21.78	$
RBGPF	0.33%	61.5	$

Spain raises 2026 growth forecast despite Mideast war turmoil

ECONOMY 29.06.2026

Spain raises 2026 growth forecast despite Mideast war turmoil / Photo: Josep LAGO - AFP

The Spanish government on Monday raised its 2026 growth forecast to 2.6 percent from 2.2 percent, saying its economy was well positioned to overcome the energy shock and other turbulence stemming from the Middle East war.

Text size:

Economy Minister Carlos Cuerpo pointed to the "momentum" of the economy to justify the improved outlook, saying growth of around 0.64 percent was expected in the second quarter.

The European Union's fourth-largest economy has comfortably outperformed its peers in recent years, recording 2.8 percent growth last year and 3.5 percent in 2024, fuelled by consumer demand, exports and tourism.

The Bank of Spain forecasts 2.3 percent growth this year amid fears of a slowdown linked to the Iran war, while the International Monetary Fund predicts 2.1 percent.

"We have dynamic growth, a more resilient economy capable of coping with shocks with more flexibility than in previous circumstances or occasions," Cuerpo told a press conference.

Iran's closure of the Strait of Hormuz in response to US-Israeli strikes sparked volatility on global energy markets and pushed inflation up worldwide.

But Spain's National Statistics Institute said Monday that inflation remained at 3.2 percent in June for the third straight month, even as electricity and gas prices increased year-on-year, according to provisional data.

The government put in place measures worth five billion euros ($5.7 billion) in March to cushion the blow on households and businesses, including tax cuts and a direct subsidy for the hardest-hit sectors.

On Monday, the cabinet approved the continuation of support for agriculture and transport, but VAT cuts on fuel are due to end from July.

W.Bonnet--PS

Featured

Trump says Iran meeting to take place in Qatar

US President Donald Trump said Iran has requested a meeting that will be held in Qatar on Tuesday, despite Tehran earlier denying that any technical talks on the deal aimed at ending the Middle East war were planned.

Kenya-US rare earths deal challenged in court over secrecy

A multi-billion-dollar rare earth minerals deal between Kenya and the United States was challenged in a Kenyan court Monday, accused of lacking transparency.

'One-time opportunity': South Korea bets big on AI boom

Huge demand for the components that power artificial intelligence presents South Korea with an opportunity to bolster its chip industry against rivals such as China, analysts say.

South Korea to invest nearly $1.2 tn in chips, AI data centres

South Korea will invest nearly $1.2 trillion -- equivalent to more than two-thirds of its GDP -- in a new chip-building hub and AI data centres over several years, as it seeks to profit from soaring demand while developing previously neglected regions.