The Moncloa Palace said Sanchez's decision will be announced after a weekly Cabinet meeting. Two officials in the ruling Socialist party have told The Associated Press the best date for an election at the moment is April 28, less than one month before local, regional and European Parliament elections set for May 26.
The officials weren't authorized to be named in media reports. One of them said that despite losing a budget vote in parliament on Wednesday, the Socialist party and the government were still considering "all options."
Sanchez became prime minister in June 2018 when Catalan separatist parties joined other parties in backing a no-confidence vote against his conservative predecessor, Mariano Rajoy. —By Aritz Parra
Spain's opposition is urging Prime Minister Pedro Sanchez to call an early election as soon as possible after his government's budget was defeated in a key parliamentary vote.
Pablo Casado, head of the conservative People's Party, said "We want elections now" to "stop separatism and unite Spaniards."
He added that the ruling socialists' defeat on Wednesday was "a de facto confidence vote against Pedro Sanchez."
The People's Party and the center-right Citizens party both held a recent rally in Madrid attended by members of an emerging far-right party, Vox, to call for Sanchez to step down.
Meanwhile, separatist Catalan lawmakers whose votes were key in rejecting the government's budget blamed the political crisis on the Socialists' refusal to negotiate over self-determination in Catalonia.
Sanchez has said that self-determination is a red line for his government because that right is not included in the Spanish constitution.
Spain's finance minister says that the country's prime minister will decide if and when to call a general election after parliament defeated the socialist administration's 2019 spending plan.
The 191-158 vote Wednesday in the lower house has exposed the weakness of the center-left minority government of Pedro Sanchez.
Maria Jesus Montero, the cabinet member in charge of the budget proposal, says the government had already said that Sanchez's term would be shortened if the spending plan didn't overcome the lower house's vote.
But she told reporters that the date for a new general election is "a prerogative that falls on the prime minister."
Spain's lower house has rejected the ruling Socialist government's 2019 spending proposal, paving the way for the possible calling of early elections by Prime Minister Pedro Sanchez.
Catalan separatist lawmakers joined Spain's center-right and conservative opposition parties in voting against Sanchez's budget plan. The six blanket objections put forward by various parties received the backing of 191 lawmakers in the 350-seat Congress of Deputies.
The Catalan parties had refused to back Sanchez's national spending plan unless the government opened the door to negotiations on the northeastern region's self-determination issue. The government has said the country's Constitution doesn't allow that.
Sanchez became prime minister last year when the Catalans joined the anti-austerity Podemos and other smaller parties in backing a no-confidence vote against his conservative predecessor, Mariano Rajoy.
A prosecutor in the Spanish Supreme Court is accusing attorneys for Catalan separatist leaders of trying to turn their trial into an examination of the Spanish state and judiciary.
Opening the second day of proceedings on Wednesday, Prosecutor Javier Zaragoza called "ridiculous" and "unjustified" the arguments made the day before by defense lawyers who said the trial is politically motivated and aims to eliminate dissent in the troubled northeastern region.
"They are trying to sit the state on the defendants' bench," said the prosecutor, adding that the trial's role is "to defend Spanish democracy and the constitutional order."
Twelve Catalan politicians and activists face years behind bars if they are convicted of rebellion or other charges for having pushed ahead with a unilateral independence declaration that opened an unprecedented political crisis in Spain at the end of 2017.
Spain's prime minister could be forced to call an early general election if Catalan separatists reject, as expected, the minority socialist government's 2019 budget in a crucial parliamentary vote.
Barring a last minute deal that touches on the sensitive issue of Catalan self-determination, the separatist lawmakers will join Spain's right-wing opposition in voting against the ruling socialists' spending plan on Wednesday.
Pedro Sanchez became prime minister last year when the Catalans joined the anti-austerity Podemos and other smaller parties in backing a no-confidence vote against his conservative predecessor, Mariano Rajoy.
But Sanchez's socialist party holds only 84 seats in the 350-seat lower house.
Negotiations with the new separatist coalition that took power in the northeastern Catalonia region after the 2017 independence push broke down last week when Sanchez's government refused to accept self-determination talks.