Spain's economy is set to grow by 0.9% in 2023, significantly less than last year but "better than most other eurozone countries," according to a report by the bank ING.

One of the reasons, says the report, is that Spain is less dependent on gas, and the economy is relatively more reliant on the service sector. 

"A further recovery in the tourism sector will also contribute positively to growth rates," it reads. "In the first 11 months of 2022, the number of international visitors was still 15% lower than in the same period in 2019. We expect the number of international visitors to continue to rise gradually and exceed pre-crisis levels by summer. Finally, the roll-out of Next Generation EU (NGEU) funds will make a positive contribution to growth rates in 2023."

The economy has been under pressure due to the slowdown in inflationary pressures eroding general purchasing power.

But there is some good news on this too. 

Spanish inflation slowed more than expected in December. Consumer prices rose by 5.8% in the year to this month, according to figures published by the national statistics office. The figure was down from 6.8% in the previous month, and a sharper fall than economists had anticipated.

Nadia Calviño, Spain's deputy prime minister and economy minister, said the data is "very positive", noting that Spain's inflation rate had now dropped by five percentage points in five months. "There may be upticks, but the trend is for inflation to continue to fall in 2023," she told Cadena Ser radio.

The ING report concludes: "Spain experienced a very strong reopening effect after the pandemic, but this effect faded away in the second half of 2022. Tightened financial conditions and an ongoing cost of living crisis will weigh on the growth outlook in 2023. Thanks to a relatively more service-oriented economy and a positive contribution from tourism, Spain is likely to outperform the eurozone average."

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