Bank of Spain raises 2026 inflation forecast to 3.9% on energy costs

Spain’s central bank expects prices to rise by 3.9% in 2026, three-tenths of a percentage point more than it forecast in June.

Higher energy costs are the main reason, including more expensive gas and oil and higher refining margins that affect diesel.

The bank says inflation could reach 4.1% if geopolitical tensions rise.

It expects inflation to ease only slightly, to 3.7%, in 2027.

Prices have risen faster in Spain than in the wider euro area, and the gap reached 1.2 percentage points in September, up from 0.5 points in April.

Tourism and hospitality prices have also contributed to the difference.

Despite the inflation pressure, the bank raised its forecast for Spain’s economic growth in 2026 to 2.6%, citing household spending, job creation and population growth.