MNI BRIEF: Spain Inflation Seen Higher In '23, '24’ -BoS
Prices seen higher and growth lower in 2023 and 2024, Bank of Spain Bulletin shows.
The Bank of Spain has revised up its domestic inflation projections for 2023 to 3.6% (from 3.2% in June) and for 2024 to 4.3% (from 3.6%), pushed higher by higher energy costs seen this year and next, the bank said in its latest economic bulletin published Tuesday.
The 2024 can, in part be explained by the effects of the extension of food and transport subsidies until the end of 2023. For 2025, the forecast is unchanged at 1.8%. Core inflation is expected seen at 4.1% in 2023, but will likely be 2.3% in 2024 -- a touch above the previous forecast. For 2025 it will remain unchanged at 1.7%. In coming months, slowing core inflation will be driven by non-energy industrial goods more than services.
Spain’s growth for Q3 could be 0.3%, with overall growth outlook lowered for 2024 and 2025. The central bank lowered Spanish growth four tenths for 2024 to 1.8% and one tenth for 2025 to 2% compared with the June projections, the bank said. The downward revision is explained by a rise in energy prices, a weakening of the global economy, tighter financial conditions and a worse than expected second half of 2023.