Economy
Spain to spearhead economic growth in Europe this year despite Iran warThe European Commission has improved forecasts for Spain, where the economy will grow above the European average, albeit at a slower pace
Añádenos en Google European Commissioner for Economy Valdis Dombrovski, European Commissioner for Economic and Financial affairs Paolo Gentiloni and Spanish Economy Minister Carlos Cuerpo. (EFE)Olatz Hernández
21/05/2026 a las 17:12h.The European economy is slowing down due to the war in Iran and its impact on energy prices. While the expectation is that European countries will grow, it will be at a slower pace this year.
This is the conclusion the European Commission has drawn in the spring economic forecasts, which indicate that some member states, such as Spain and Poland, will grow above the European average.
The case of Spain is particularly noteworthy, as it is the only European country that has improved its forecasts compared to autumn 2025 projections. The Commission expects Spain to grow by 2.4% this year (1% more than expected in the autumn) and by 1.9% in 2027 (0.4% more than projected in November).
The Commission's forecasts are slightly better than the Spanish government's for 2026 and less optimistic for 2027. The Ministry of Economy said in September of last year that the Spanish economy would advance by 2.2% this year (compared to the 2.4% Brussels had calculated) and by 2.1% next year (compared to 1.9%).
Brussels expects economic activity in Spain to remain strong in 2026, but anticipates a gradual slowdown due to the impact of the war in the Middle East. Domestic demand will drive the economy, alongside a robust labour market and increased investment.
The Commission forecasts that inflation will rise to 3% this year due to higher energy prices. At the same time, it expects the public deficit to stabilise this year and fall to 2% in 2027. Public debt will also decrease, dropping below 100% of GDP within the forecast horizon.
Last autumn, Brussels forecast that Spain would grow by 1.4% in 2026 (now 2.4%) and by 1.5% in 2027 (compared to the 1.9% it now expects).
The Ministry of Economy has confidently accepted the data from Brussels, which consolidates Spain as the major economy that will grow the most this year and next, well ahead of Germany (0.6% and 0.9%), France (0.8% and 1.1%) and Italy (0.5% and 0.6%). In addition, for the first time since 2007, the unemployment rate will fall below 10%, reaching 9.9% in 2026 and 9.6% in 2027.
Germany loses momentum
Forecasts for the rest of Europe are not so promising. The European Commission has lowered its economic forecast for this year by 0.3% and estimates that the Eurozone will grow by just 0.9% this year and 1.2% next year. For the EU as a whole, it indicates that GDP will be slightly better, with the European economy growing by 1.1% this year and 1.4% in 2027.
Among the countries the Commission expects will grow the most this year are Malta (3.7%), Poland (3.5%) and Lithuania (3%). At the other end are Belgium (0.7%), Austria and Germany (both at 0.6%) and Romania (0.1%).
The case of the German economy is particularly striking, as it was likely to gain momentum and grow by 1.2% in 2026 and 2027. However, the European Commission now expects the country to grow by only 0.6% this year and 0.9% in 2027.
Economy Commissioner Valdis Dombrovskis said that the conflict in the Middle East has triggered an energy shock that has put Europe in a bind, "as it navigates a volatile geopolitical and trade landscape".
"Europe must learn from past crises, maintaining temporary and targeted fiscal support and reducing its dependence on fossil fuels," Dombrovskis stated. He said that the EU must act with "unity and determination by accelerating reforms, removing barriers to growth and safeguarding public finances".