Spain raises its growth forecast to 2,6% and updates its anti-crisis shield in response to the Middle East war

Photograph of La Moncloa.

Spanish Economy

The Spanish government has approved the extension of the measures in its Crisis Response Plan for the Middle East, gradually adjusting fuel subsidies until September. At the same time, the government has revised its GDP growth forecast for 2026 upwards to 2,6%, based on strong consumer spending and investment.

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El Consejo de Ministros has approved a new royal decree-law that updates and extends the extraordinary measures of Comprehensive Crisis Response Plan for the Middle EastThe regulations, which extend aid that was due to expire on June 30, introduce adjustments to fuel subsidies and launch structural initiatives to strengthen the country's energy sovereignty. Meanwhile, Gobierno has revised its GDP growth forecast for 2026 upwards, placing it at 2,6%.

As detailed Carlos Cuerpo, first vice president of Gobierno And the Minister of Economy, Trade and Business, the new framework is structured around two main axes. The first, of a temporary nature, extends key aid programs for three months, while the second focuses on "structural initiatives aimed at strengthening energy sovereignty, reducing dependence on fossil fuels and increasing the resilience of the Spanish economy."

Adaptation of fuel subsidies and sectoral support

In the area of ​​short-term measures, Carlos Cuerpo He explained that direct aid will be maintained for primary sector and transportThese are two strategic pillars for the national and international supply chain. However, widespread support for household fuels will be gradually withdrawn to adapt to the normalization of prices in international markets.

“As international market prices decrease, we will gradually withdraw support for fuel tax reductions for households,” the minister stated. The phased-out plan includes reducing the subsidy from the current 20 cents per liter to 15 cents in July, 10 cents in August, and 5 cents in September. However, a automatic reactivation clause which would return the aid to 20 cents if the year-on-year inflation of fuels exceeds 15%.

To ensure the effectiveness of these measures, the following has been enabled: National Commission for Markets and Competition (CNMC) to request information from wholesalers and retailers in the distribution chain, thereby strengthening control and transparency mechanisms. Additionally, an injection of €165 million has been approved for the purchase of fertilizers, bringing the total to €500 million already allocated.

Fuel Subsidy Reduction Schedule (2026)

Month	Aid per Liter
Until June	20 cents
July	15 cents
August	10 cents
September	5 cents

Structural measures for energy sovereignty

On a structural level, the most notable measure is the progressive elimination of Tax on the Value of Electricity Production (IVPEE)This tax will decrease from the current 7% to 5% by the end of 2026, to 3,5% in 2027, and will be completely eliminated in 2028. Cuerpo He described the measure as "costly in terms of the budget, but appropriate to continue strengthening the electrification of the economy."

Along the same lines, the third vice-president and minister for Ecological Transition and the Demographic Challenge, Sara AagesenShe emphasized that this tax cut "will help lower energy bills for households, businesses, and industry" by up to 6%. The minister also highlighted that the deployment of renewable energy will be promoted through the creation of a seal of social, territorial and environmental excellencewhich will be developed by the National Standardization Body (UNE) to give preferential processing to the most sustainable projects.

Macroeconomic outlook update: growth and employment

El Gobierno The government has updated its economic outlook for the period 2026-2029, revising its 2026 GDP growth forecast upwards from 2,2% to 2,6%. According to the Minister of Economy, this improvement is based on "the moderation of uncertainty surrounding the conflict in Irán"and the dynamism of the Spanish economy. The forecast for 2027 is 2,2%, remaining above 2% until 2029."

Private consumption, with an estimated growth of 2,8%, and investment are consolidating their position as the main drivers of the economy. The government also projects a 2,4% increase in the number of employed people by 2026, which would allow the unemployment rate to fall below 10% this year, with a downward trend to 8,5% in 2029. This dynamism, according to Carlos CuerpoIt is compatible with the improvement of public finances, anticipating a reduction of the deficit to 2,1% of GDP in 2026.

Key Macroeconomic Forecasts Gobierno (2026-2029)

Indicator	2026 Forecast	2027 Forecast	2029 Forecast
GDP growth	2,6 %	2,2 %	>2,0%
Unemployment Rate	<10%	Progressive reduction	8,5 %
Public Deficit (% GDP)	2,1 %	1,8 %

Key points and frequently asked questions about the new economic measures in Spain

How do these measures affect exporting and logistics companies in Spain?

The gradual reduction of fuel subsidies will directly impact the operating costs of transport fleets. Companies in the logistics and export sectors will need to adjust their cost forecasts for the coming months. In the long term, the elimination of the tax on electricity production will reduce energy costs, improving the competitiveness of Spanish industry, especially in energy-intensive sectors.

What are the consequences of eliminating the Tax on Electricity Production?

The elimination of this tax by 2028 aims to structurally reduce the cost of electricity in EspañaFor companies, this means a reduction in fixed costs, an incentive to electrify their production processes, and improved competitiveness in international markets. It also positions España as a more attractive destination for industrial investment.

What should managers know about the GDP growth revision to 2,6%?

The upward revision of GDP is a sign of the strength and resilience of the Spanish economy. For business leaders, this translates into a more confident environment, with stronger domestic demand and improved business prospects. This dynamism, combined with a path toward deficit reduction, reinforces the country's macroeconomic stability, a key factor for strategic planning and attracting foreign investment.