US tariff uncertainty hits Spain GDP forecast

Uncertainty from US President Donald Trump’s tariffs, and the risk they bring a global slowdown, forced Spain’s central bank on Tuesday to downgrade its 2025 economic growth forecast.

It predicted Spain’s economy would grow 2.4 percent this year, down from a previous forecast of 2.7 percent.

The Bank of Spain said a “small slowdown in the pace of GDP growth” was expected over the second half of 2025.

It also lowered its 2026 forecast from 1.9 percent to 1.8 percent.

The recalculations were due to “heightened uncertainty” for the world economy, the bank said.

Markets “remain very vulnerable to possible negative disruptions that could arrive in coming weeks”, it said, noting that dipping confidence would likely have “a negative impact on consumption”.

While the Bank of Spain said that negotiations the United States was holding with major trading partners held out hope of “de-escalation”, it did not rule out “an intensification of the trade war”.

Spain is part of the eurozone.

In its own forecasts given at the end of last year — before Trump took office and subsequently announced the higher US tariffs — the European Commission forecast 2.6 percent growth for Spain this year.