Spain cuts 2022 growth forecast
MADRID: Spain on Friday slashed its economic growth forecast for 2022, mainly due to the fallout of Russia’s invasion of Ukraine which has fuelled inflation and eroded consumer purchasing power.
The gross domestic product of the eurozone’s fourth-largest economy is now expected to expand by 4.3 per cent rather than the 7.0 per cent previously forecast, the economy ministry said.
This is lower than the growth of 4.5 per cent forecast by the Bank of Spain and the 4.8 per cent expansion predicted by the Washingtonbased International Monetary Fund.
Economy Minister Nadia Calvino said the government was being “extremely prudent” due to the “considerable uncertainty generated by the war”.
“The aggression against Ukraine is having important economic and social effects, which are affecting all European countries,” she told a news conference to announce the new forecast.
Madrid had previously hoped for a firm recovery for 2022, reasoning that the impact of the coronavirus pandemic would begin to ease.
But Russia’s invasion of Ukraine on February 24 has further exacerbated supply chain woes and pushed up prices of daily necessities, especially energy.
Spanish inflation stood at 8.4 per cent in April ater hiting 9.8 per cent in March, a 37-year high and one of the highest levels in the eurozone.
Spain’s economy expanded 0.3 per cent in the first quarter of 2022, slowing from 2.2 per cent in the previous three months, national statistics institute INE said earlier on Friday.
The slowdown was due mainly to 2.7 per cent drop in household consumption during the period, it added.
Rafael Pampillon, an economics professor at Madrid’s IE Business School, said first quarter growth was “very weak” and predicted the full-year expansion could be lower than the government’s forecast.