Bank of Spain to improve growth forecast for year end and into 2026

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The financial institution has called for coordination and "a unified effort" from central government, regional governments and municipal councils to address the housing crisis

C. P. S.

Madrid

Tuesday, 23 December 2025, 16:55

The Bank of Spain is to make an upward revision of its growth forecast for the Spanish economy for 2026. This estimate that stood at 1.8% in September has since become outdated, following the latest data that points to the resilience of the Spanish economy and its labour market .

This was confirmed on Friday by the governor of the Bank of Spain, José Luis Escrivá, who noted that the Bank's monitoring process had already raised Spain's GDP growth forecast for 2025 by two tenths of a percentage point, to 2.6% and had kept its projections for 2026 and 2027 unchanged at 1.8% and 1.7% respectively.

The institution will thus align itself with other international organisations that have already updated their economic outlook for Spain, such as the IMF, the European Commission and the OECD. All have better expectations for the national economy, placing their growth forecasts in the region of 2.9%, in line with the one used by the Spanish government.

This Tuesday, 23 December, the Bank of Spain will publish its final quarterly report of 2025, which may also include some reference to the housing market and the affordability crisis generated by the lack of supply and the upward trajectory of property prices.

During an interview with RTVE on Spanish TV, Escrivá stated that tackling this issue requires "coordination and a unified effort" from all three levels of government involved. "Housing is a local, regional and statewide responsibility to varying degrees and it's essential that these levels converge," he stressed.

As recent reports from the Bank of Spain have shown, an increase in the supply of housing must be encouraged, especially affordable housing for low-income and lower-middle-income groups, where the problem "is most acute".

Escrivá believes that, at the same rate at which homes are being created in Spain and the population is increasing, it is necessary to ensure that the supply follows this increase in demand, "because the gap that has opened up in recent years is significant". The Bank itself estimates a housing shortage in Spain of around 700,000 homes by 2025.