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The European Commission lowers its 2022 growth forecasts for the Spanish State

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The GDP will grow by 4% (1.6% less than expected in February) and the CPI will reach 6.3% (the estimate was 2.8% at the beginning of the year). Brussels points to tourism as the engine of the Spanish economy, and hopes that the Recovery Plan will help improve the situation.

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The European Commission estimates that the Spanish economy will grow by 4% in 2022 (1.6% less than estimated in February), despite which it will be the fourth in growth in the EU as a whole, only surpassed by Ireland, Malta and Portugal. The average GDP growth in the European Union is 2.7%. The growth estimate is 0.3 percentage points below the growth forecasts presented by the Spanish government two weeks ago.

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Likewise, Brussels has doubled its forecast for 2022 CPI rebound to 6.3% (compared to the 2.8% estimated at the beginning of the year), whose peak will be reached in the middle of the year. These levels will bring, according to Brussels, the deterioration of the purchasing power of the Spanish due to the rise in prices, which will cause consumption to remain at levels that are still lower than those of the pandemic. The community average of inflation growth is 6.8%.

For him 2023, Brussels estimates a rebound in Spain’s GDP of 3.4%, up to one percentage point less than forecast at the beginning of the year and last November. This estimate coincides with that of the Spanish Executive, which has estimated the growth of the Gross Domestic Product at 3.5%.

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The inflation in Spain instead, will contract to 1.8% in 2023which represents, in any case, 0.7 percentage points more than what was projected in February.

The European Commission has highlighted that the sightseeing has been the engine of the Spanish economy from the summer of 2021 and that economic growth will accelerate from the third quarter of 2022, thanks to investments under the Recovery Plan and the recovery of consumption, which in turn will be boosted by the recovery of the labor market and the levels of savings derived from the pandemic.

These forecasts are framed in a scenario of price growth driven by energy cost after the Russian military invasion of Ukraine. Brussels points out that the rise in energy prices in Spain has been faster than in other countries in the euro zone, which may have consequences in sectors such as transport, construction or the electro-intensive industry and, in parallel, could affect to private consumption.

The labor market will remain “strong”according to Brussels forecasts, which places the unemployment rate in Spain at its lowest level since 2008, at 13.4% for 2022 and 13% for the following year.

As regards the levels of debt of Spain, the European Commission has estimated that it will place 115.1% of GDP in 2022and 113.7% of GDP in 2023, above the community and euro zone average and the country with the third highest levels only behind Greece and Portugal.


Source: Eitb

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