Will Spain Grow Despite Iran War?

In Spain, GDP is projected to increase by 2.1% in 2026 for leading countries in Europe and double their average. This forecast is 0.2% lower than the previous one (which was 2.3%). On the other hand, it announces that Spanish inflation will be 3% higher than European inflation, which will be 2.6%.

Airef (Agencia Independiente de Responsabilidad Fiscal) also reflects an increase in Spain’s PIB to 2.3 years suffering from expected inflation of 3% due to the Iran war.

My view is that both the IMF and Airef are overly cautious in this regard Spanish PIB. When you walk around four years ago in Spain, these predictions will be revealed.

The Iran war will be difficult for this growth. But it will give wind to the Spanish economy.

The United States, another large market alone represents 4.5% of total Spanish exports

Exports to Asian countries, including China, may be limited to less growth. China has cut its growth forecasts from 5/4.5% to 4% this year: as it will export less to countries in conflict and beyond; y because on internal demand flojea. But China only accounts for 2/3% of our exports.

Our main customers are Central European and English speaking. Middle-class Europeans have become accustomed to buying fresh Spanish produce, fruit and vegetables for health reasons; a custom that varied very little with price. You will use less candidad, but you will pay more for it.

The United States, the second largest market, represents 4.5% of total Spanish exports. Trump’s orange influence, but not much.

After the Iran war, on the other hand, there were positive factors for the Spanish economy.

The first is the destination of European and international tourism in the Iberian Peninsula and the Balearic Islands and the Canary Islands. The war is complicating tourism in Southeast Asia as airlines fly through the Persian Gulf airport.

The foreign inversion is resorted to, and since then Spain has continued without building the necessary

Spain will count 100 million tourists. Tourists who will enjoy it more because prices will suffer from inflation.

So does Spain’s energy mix from vantagea to its intensive energy industry. The presence of renewable sources means that Spain is less dependent on fossil fuels. But 50% of your energy is wind, solar or hydro.

Electricity will be cheaper than internationally; competitive factor. Our gas supplier is in the Mediterranean (Algeria) or the Atlantic (EEU and Caribbean). The prices will be high, but he who gets lost in other countries will be in charge.

Thanks to the “regularization” carried out by the government, many of the 500,000 regularized people will enter the official labor market and will be willing to work for low wages. This will reduce labor costs and increase the company’s margin.

Especially in the field of Pymes, hospitality and tourism. A growth factor because few of the “regulated” ones will disappear with the current uncertainty.

The real estate sector will be an ambivalent factor. Foreign inversions will take refuge and as Spain continues to build the necessary, with the increase in the number of families, the price of housing will continue to be high. It was the birthplace of many young people.

Spain will grow in the real estate sector. But young Spaniards will live on.

A predatory fiscal system combined with rising inflation will undermine the middle class and reduce the purchasing power of their wages. But it will enable more public gas, which Sánchez says the government is paying more every day to civil servants, pensioners and subsidies.

There are multiple factors at play. But only with this one can predict that:

1. The Spanish economy will grow more than national and international organizations expected. Por top 2.5%.

2. The middle class and Spanish workers will lose purchasing power.

You will like this diagnostic or not, depending on whether the reader is rich or middle class or employed, in the private or public sector, as a business owner or in business.

Since the PIB is static, the real deal is on the wallet.

** JR Pin Arboledas is an IESE professor.