Bank of Spain cuts GDP growth forecast amid US trade policies

The Bank of Spain has lowered its 2025 economic growth forecast for the country, citing heightened economic uncertainty due to US trade policies.

In a statement yesterday, central bank governor Jose Luis Escriva announced an expected GDP growth rate of 2.4%, down from the March projection of 2.7%. The official also described the European Central Bank’s (ECB) recent decision to cut interest rates as "requiring adjustments." He attributes this stance to the eurozone economy’s current dependence on the trade policies of US President Donald Trump.

According to Bloomberg, Spain’s inflation slowed more than expected last month due to weaker growth in electricity bills, and declining prices for transport and recreational services. These developments have strengthened the government’s case for rate cuts.

Escriva added that the regulator expects inflation to reach 2.4% this year, while consumer price growth is projected to slow to 1.7% in 2026. Simultaneously, the Bank of Spain revised its GDP growth forecast downward for the same period, from 1.9% to 1.8%.