MADRID, June 20 (Xinhua) -- The Bank of Spain on Monday raised its forecast for Spain's gross domestic product (GDP) in 2023, predicting that it will grow by 2.3 percent, 0.7 percentage point higher than its previous forecast in March.
However, in the bank's quarterly report on the Spanish economy and macroeconomic projections, it reduced its GDP expectations for 2024 to 2.2 percent growth (0.1 percentage point down). For 2025, it foresees 2.1 percent growth.
The report also says that inflation in Spain will to continue to fall, ending 2023 at 3.2 percent, 0.5 percentage point lower than predicted in March. The bank forecasts a 3.6 percent inflation rate for 2024, and 1.8 percent for the following year.
Meanwhile, core inflation (which does not include volatile costs such as fresh food and energy prices) is forecast to end 2023 at 4.1 percent, dropping to 2.1 percent in 2024 and 1.7 percent in 2025.
The bank said the latest revision was based on relatively favorable global economic activity so far in 2023, with energy costs dropping, the labor market improving, and a rise in private consumption.
The Ministry of Economic Affairs and Digital Transformation welcomed the report, saying it shows the effectiveness of the measures put into place to control inflation.
Spanish state TV website RTVE quoted ministry sources as saying that the bank's report has highlighted the important contribution of the government's economic policy to the current rate of growth of the Spanish economy.
However, the Bank of Spain's predictions are slightly more optimistic than those of the Organization for Economic Cooperation and Development (OECD) earlier in June.
The OECD's Economic Outlook report forecast 2.1 percent growth for 2023 in Spain, and 1.9 percent for 2024. ■
