The Bank of Spain forecasts GDP growth of 0.1% in the third quarter

MADRID, October 5 (Reuters)Spain’s central bank said on Wednesday it estimated the country’s economy grew just 0.1% in the third quarter from the previous three months due to lower private consumption amid the energy shock. in Europe hit households.

“Higher energy prices, which gradually spread to a growing share of goods and services, reduced household purchasing power,” leading to lower spending, the central bank said in its projections. quarterly macroeconomics.

The central bank said it also expected a “very significant” slowdown in growth in the second half of this year and the first quarter of next year, leading to a growth rate of 1.4. % in 2023, compared to 2.8% previously forecast.

The Spanish economy, like the rest of the euro zone, has been hit by the consequences of the Russian invasion of Ukraine, the Bank of Spain said.

Growth almost stalled in Spain in the third quarter came after growth exceeded expected expansion of 1.5% in the second quarter following the easing of COVID-19 related restrictions and a stronger recovery of industries such as tourism.

This led the Bank of Spain to revise its economic growth forecast for this year upwards to 4.5% from 4.1%.

The central bank has raised its expectation for EU harmonized annual consumer inflation to 8.7% in 2022, from 7.2% previously, and expects a still high rate of 5.6% in 2023 ahead of a down to 1.9% by 2024.

(Reporting by Jesús Aguado, additional reporting by Emma Pinedo, editing by Inti Landauro and Alex Richardson)

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