Spain’s economy will likely grow around 1.6% this year, a 0.3 percentage point increase over the previous forecast.

This is predominantly due to stronger-than-predicted growth in 2022, according to Bank of Spain’s chief economist, Angel Gavilan.

GDP grew at a faster-than-forecast 5.5% last year as Spain sidestepped a recession in the fourth quarter during a global economic slowdown.

Spain’s statistics institute has upwardly revised the initial growth predictions for Q1 and Q2 last year, whilst the economy grew 0.2% in Q4 compared to the previous quarter, surpassing the 0.1% figure forecast by the central bank, Reuters news agency reports.

“Mechanically, this new information would prompt an upward revision in the GDP growth rate in 2023 by about 0.3 percentage points,” the central bank’s chief economist said during a presentation shown on the Bank of Spain's website.

Earlier this week, the European Commission revised its growth forecasts for Spain for this year, up to 1.4% from a previous 1% prediction.

For the first quarter of this year, the Bank of Spain’s chief economist also forecasts a higher-than-expected growth rate, similar to the fourth quarter of 2022.

The central bank is set to publish its latest official forecasts next month, the Reuters report goes on to say.

Angel Gavilan also pointed towards a 0.15 percentage point downward revision of this year’s inflation projections. The current forecast for European Union-harmonised inflation stands at 4.9%.

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