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European Commission Raises Its Economic Growth Prediction for Spain

Based on Spain’s better-than-expected economic performance in the first quarter, the European Commission on Monday lifted its forecast for Spain’s economic growth in 2023 to 1.9 percent from a prediction of 1.4 percent in December.

According to the revision, Spain is expected to grow the most in 2023 among EU’s four major economies as the forecast for Italy is 1.2 percent, France 0.7 percent and Germany 0.2 percent, while the average for the EU region will be 1.1 percent.

Javier Diaz-Gimenez, professor of economics at the Barcelona-based IESE Business School, called the better figure a “magnificent number,” saying that “the forecast reflects the reality of a first quarter that went very well, and the start of a second quarter, including an Easter, that went better than expected.”

Continued high consumer spending in the aftermath of the pandemic, increased tourist revenue, and a relatively buoyant job market jointly contributed to the better performance, Diaz-Gimenez told Xinhua.

“If we assume Spanish GDP continues to grow at this rate, we could be talking about more than 1.9 percent,” he said, adding “that’s great news” in these volatile and complex circumstances.

“So far in 2023 nothing negative has happened to the economy and instead we’ve seen positive news, which is reflected in the spending and the behaviour of people,” said Diaz-Gimenez.

However, the professor also warned of the uncertainties of external economic and political situation and changes.

“Right now no one can predict what will happen with the Ukraine conflict, or whether there will be more problems with the banks, or any other problem like this,” he added.

Although the European Commission issued better forecast of Spain’s economic growth for 2023 and 2024 (2 percent), the figures remain below the Spanish government’s previous forecast, which set 2.1 percent and 2.3 percent respectively for 2023 and 2024.

“It’s also an election year and so there will be more public spending and more public employment,” Diaz-Gimenez told Xinhua, expecting more positive economic elements through the year.