The Bank of Spain announced on Tuesday that it expects the country's economy to grow by a robust 2.7% this year, an increase from its previous forecast of 2.5%, driven by a surge in private consumption, unlike the rest of the eurozone.

The bank credited the revision to recent growth data released at the end of January, as well as the positive effects of higher household income on consumption. The government's own forecast anticipates a 2.6% growth.

This year’s growth is expected to be slower than the 3.2% recorded last year, but it stands in contrast to the larger economies of the eurozone, such as France, Germany, and Italy, all of which are projecting growth rates of 1% or below.

The central bank also noted that recent geopolitical tensions pose a risk to Spain's economy. However, it added that its forecast did not account for any potential impacts these tensions may have on economic activity, Reuters reports.

Bank of Spain chief economist Ángel Gavilan stated in a press briefing that, for the time being, he does not foresee a recession in the United States. However, he added that if any risks were to materialise, “the impact would not be negligible on global GDP or on the Spanish economy.”

The central bank kept its growth forecasts for 2026 and 2027 unchanged at 1.9% and 1.7%, respectively. In addition, it anticipates quarterly growth in the first quarter of between 0.6% and 0.7%.

Unemployment rates are expected to continue declining between 2025 and 2027, though at a slower pace than in 2024, due to lower job creation and a slowdown in population growth, including migration, one of the country’s key growth drivers.

Furthermore, Spain’s EU-harmonised consumer inflation is projected to rise to 2.5% this year, up from the previous forecast of 2.1%, primarily driven by higher energy prices observed at the start of the year.

The Bank of Spain kept its inflation outlook unchanged at 1.7% for 2026 and 2.4% for 2027.