Bank of Spain Governor Jose Luis Escriva announced on Monday that the bank has cut its economic growth forecast for this year to 2.4% from 2.7% previously. Despite the downward revision, Spain's expected growth remains above the eurozone average.

In addition to adjusting this year's forecast, the Bank of Spain also slightly lowered its growth outlook for next year, from 1.9% to 1.8%. This is a decline from last year's 3.2% expansion, a reduction Escriva attributed to weaker growth in other economies due to uncertainty caused by the ongoing tariff war between the United States, China and Europe.

Escriva pointed out that Spain's central macroeconomic scenario incorporates a modest tariff increase and a fiscal boost from defense spending. Meanwhile, the ECB expects average growth in the common currency area to be 0.9% in 2025 and 1.1% in 2026.

In addition to the growth forecast, Escriva said the Bank of Spain also adjusted its inflation forecast for this year, down to 2.4% from 2.5% previously.