MNI BRIEF: Growth Up, Inflation Lower In March Forecast–De Cos

The Bank of Spain's March forecast will revise its inflation projection lower and growth outlook higher for 2023 compared to December, when growth was seen at 1.3% and inflation at 4.9%, Governor Pablo Hernandez de Cos said in an event in Madrid Tuesday. In mid February, a national official said that growth would reach 1.6% and inflation 4.75% in 2023, numbers that could yet be revised further.

De Cos stressed that the revision will only affect headline inflation, not core, that will be more stubborn. “I underline general inflation because core will be more persistent in the short term and only will start to moderate after some months,” he said.

Prudence should be at the heart of any economic analysis as the effects of monetary tightening are already being seen and excess savings, that helped explain part of European resilience, are rapidly reducing, the governor said.