SPAIN will be the fastest-growing major advanced economy in 2026, according to the International Monetary Fund (IMF).

The fund now expects Spanish GDP to grow by 2.5% this year. 

That is four-tenths of a point more than it forecast in July, but still a tenth below the Spanish government’s own estimate and the consensus among economists.

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Upgrades for Spain have become a habit for the IMF, which tends to underestimate the economy.

The upgrade could hardly have come at a better time for Pedro Sánchez. The prime minister called a snap general election for November 29 last week, after two key decrees aimed at tackling the housing crisis were repealed.

The economy is likely to be one of his strongest cards, and the Socialists can be expected to make plenty of the IMF figures on the campaign trail. His rivals, though, can point to an unemployment rate that is still among the highest in Europe.

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Unemployment should stay below 10% this year and next. While that is high by European standards, it is historically low for Spain.

The report gives no reason for the revision, but experts point to a strong jobs market, healthy consumer spending and services exports.

The IMF left its 2027 forecast unchanged at 1.8%, while other forecasters have raised theirs to as much as 2.2%. The fund finalises its figures well in advance, so it often trails analysts working with more recent data.

It expects inflation to ease to 2.7% next year, a point below this year’s rate.

The Bank of Spain predicts 3.7% because it assumes gas prices will stay very high in the coming months.

Across advanced economies, the IMF has revised growth up by four-tenths to 2.1%. It puts this down to resilience in the face of rising energy prices caused by the war with Iran. It credits Spain and an improving Ireland with lifting the eurozone to 1.1%.

At its autumn meetings with the World Bank, held in Bangkok this week, the IMF said investment in artificial intelligence was boosting growth.

It also warned that a prolonged war could reignite inflation and hit energy importers and poorer countries hardest. It flagged high public debt and historically high deficits in several major economies.

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