Bank of Spain will lower its GDP forecast by a few tenths next week and inflation slightly

MADRID, 1 Jun. (EUROPA PRESS) -

On Friday, June 10, the Bank of Spain will revise its growth forecasts for the Spanish economy in 2022 "a few tenths downward" compared to what was estimated in April (4.5%), and will also lower its estimates "slightly" for the inflation, although it will raise the underlying.

This was announced by the Governor of the Bank of Spain, Pablo Hernández de Cos, during his speech at the Committee on Economic Affairs and Digital Transformation of the Congress of Deputies to present the Annual Report of the Bank of Spain.

The governor explained that next Thursday the Governing Council of the European Central Bank (ECB) will be convened, in which "monetary policy decisions will be made" and new forecasts for the euro area will be published.

On Friday, after knowing the data from the ECB and being "compatible" with these figures, the Bank of Spain will publish its perspectives for the coming years regarding the Spanish economy. "The economic prospects are, in any case, subject to a very high degree of uncertainty", warned, however, the governor.

In fact, the information known after the publication of the latest projections by the Bank of Spain would point, in the absence of additional disturbances, to a new downward revision in GDP growth in 2022, as a consequence of the fact that the evolution in the first quarter was more unfavorable than projected. This cut would be "a few tenths", as the governor himself has clarified.

Regarding inflation, the new data point to greater advances in the non-energy component, while the energy component is experiencing high growth, but somewhat more modest than expected in April. In addition, in the coming months the Iberian mechanism to limit the price of gas and lower the price of electricity - which has recently been approved in Spain and Portugal, according to the European Commission - will foreseeably put downward pressure on energy prices in the country.

For this reason, Hernández de Cos has advanced that the Bank of Spain's next forecasts will cut the annual inflation rate for the year as a whole --forecast at 7.5%--, although he has warned that the body will raise, that yes, core inflation.

Looking ahead, the governor has indicated that available forecasts indicate that inflation will remain at high levels in the coming months, gradually moderating towards levels consistent with the ECB's medium-term inflation target of 2%.