The Bank of Spain has taken two months to revise downwards the growth forecast for the Spanish economy of 4.5% that it formulated just two months ago for 2022. During this time, the INE has revealed that the performance of the Spanish economy was weak in the first quarter, with growth of barely 0.3%, and the inflationary context has worsened and has cast a shadow over the projections on its future evolution. With these elements in hand, the institution has decided to cut its growth forecast for 2022 to 4.1%, it has also revised growth for next year downwards and has warned that the 2022 data could still be lower.
Otherwise, the forecast today is 4.1%, but the probability that this figure will be revised downwards again in the coming months is high. That's the way things are.
And this table does not exhaust the map of risks that threaten the Spanish economy. The Bank of Spain admits that if the political conflict between Algeria and Spain leads to supply problems, and given that Spain receives 30% of the gas it consumes from Algeria, the impact of this geopolitical problem on growth and inflation would be appreciable.
The general diagnosis of the institution has not changed. Inflation continues to emerge as the main problem for economic growth. The institution's new forecasts soften its average inflation forecast for 2022 to around 7%, but raise the forecast for next year, in line with what more and more analysis institutes assume: that inflation is going to keep e levels high for a few more months.