Spain raises GDP growth forecast to 2.4% in 2025, to 2.2% in 2026

MADRID (Reuters) - The Spanish government has raised its GDP growth forecasts for 2025 and 2026 to 2.4% and 2.2% respectively, Economy Minister Carlos Cuerpo said on Tuesday, as the country's economy outpaces its euro zone peers.

The government has hiked its forecasts for the two years by 0.2 percentage points, Cuerpo said in a news conference.

"The factors that will drive the growth of GDP in 2025 and 2026 will be private consumption and investment," he said.

The government also expects the unemployment rate to gradually fall to 9.7% in 2026, down from 12.2% in 2023.

The minister had said on Monday the government raised its economic growth forecast for this year to 2.7%, from a prior 2.4%.

Despite the projected uptick in growth, the ministry kept its deficit forecast for this year at "close to 3% of GDP".

The forecast upgrades follow a general revision for the 2021-2023 period released by the Spanish statistics department (INE) last week. The revision put the size of the Spanish economy at 1.5 trillion euros ($1.67 trillion) in 2023 and revised upwards the annual growth for 2023 to 2.7% from 2.5%.

With the revision, the Spanish economy widens the gap with the rest of the euro zone. The 20-country bloc is expected to grow a scant 0.8% this year, according to European Commission data.

Spain's central bank expects 2.8% growth this year and a quarterly 0.6% expansion in the third quarter.

(Reporting by Inti Landauro, Belén Carreño and Natalia Siniawski, editing by David Latona, Sharon Singleton and Susan Fenton)