Spain’s economy is set to grow faster than previously expected this year, the central bank said Friday, as the government heads into a snap general election on November 29th.
The Bank of Spain now sees gross domestic product rising by 2.6 percent, up from a forecast of 2.3 percent growth in June, citing resilient household spending.
But it sees growth slowing to 2.2 percent next year, as household consumption is expected to lose momentum over the coming quarters.
In its latest quarterly report, the central bank also raised its inflation forecast for this year to 3.9 percent from 3.6 percent previously.
The bank said the inflation outlook in the coming months would depend heavily on the trajectory of the global energy shock.
“The continuation of the conflict in the Middle East… as well as the intensification of hostilities in recent weeks, are keeping the global economy in a climate of great uncertainty and volatility,” it said.
Spain’s inflation rate accelerated to 4.9 percent in September, its highest level since February 2023, according to national statisitcs office INE, prompting the government to extend support for households and businesses until the end of the year.
Cost of living concerns are expected to be a key issue in the election campaign, alongside a housing crisis that has fuelled protests across the country.
The election was originally scheduled for 2027 but Socialist Prime Minister Pedro Sánchez brought it forward Monday after his minority government failed to pass housing measures proposed in response to the protests.
