MNI BRIEF: Spain’s Inflation, Growth Up, Risks To Upside -BOS

The Bank of Spain has raised its inflation and growth outlook, with risks seen to the upside for inflation, while for growth they are balanced if slightly tilted to the downside in the longer part of the horizon, projections published on Tuesday showed.

This year’s inflation forecast was revised up to 2.7% (0.2 percentage points more than in September) while it was seen at 2.1% in 2026. (0.4 more) But inflation for 2027 was revised down 0.5pp to 1.9% due to the postponement of the extension of the EU’s Emissions Trading System ETS2. Risks for prices are tilted to the upside due to the potential for wages pressure.

The projections revised economic growth for 2025 to 2.9% (0.3 more), for 2026 to 2.2% (0.4 more) and for 2027 to 1.9% (0.2 more), due to better-than-expected foreign and domestic demand and the benign evolution of trade tensions. (See MNI SOURCES: ECB Seen On Hold For Extended Period)