Bank of Spain cuts growth forecasts amid US tariff uncertainty

The Bank of Spain has revised downward its economic growth forecasts for the country, cutting the projection for 2025 from 2.7 percent to 2.4 percent, and that for 2026 to 1.8 percent, due to uncertainty stemming from U.S. tariff policies.

Jose Luis Escriva, the bank's governor, made the announcement on Monday during a speech to parliament's economic commission, ahead of the publication of the bank's quarterly report on the Spanish economy, scheduled for June 10.

Escriva used the word "uncertainty" no fewer than 18 times in his speech, underlining that while Spain's direct trade exposure to the U.S. is lower than that of other major European Union economies, the country is indirectly vulnerable, particularly in sectors such as chemicals, due to its integration into global value chains.

He also warned that prolonged uncertainty could increasingly weigh on Spain's economy. He noted that uncertainty remains the major concern for businesses, with many Spanish companies reporting impacts from the tariffs.

Despite the downgraded growth forecast, the bank has retained its projection for the unemployment rate in 2025 at 10.5 percent, while slightly improving the estimate for 2026, lowering it to 10.2 percent from the previous report.