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Brussels predicts Spanish economy will grow twice as much as EU neighbours France and Italy
Despite the positive outlook, food in Spain is still a staggering 10.5% more expensive than this time last year
There’s some good news for consumers this week as the European Commission has again revised upwards its economic growth projections for Spain in 2023. On Monday September 11, Brussels confirmed that the country’s GDP (gross domestic product) should advance by 2.2% before the year is out.
In general, and assuming that inflation is somewhat under control, when a nation’s GDP is increasing it means that both individuals and businesses can expect to be better off.
If the EC’s forecasts hold fast, Spain will be the European economy that grows the most during 2023, blitzing past the eurozone average of 0.8%. What’s more, the country’s financial recovery will more than double that of France (1%) and Italy (0.9%) and would far exceed the projected growth for the likes of the Netherlands (0.5%), Poland (0.5%) and Germany, which would close the year negatively with a decline in its GDP of 0.4%.
However, it is worth remembering that all of these countries recovered their pre-pandemic GDP level faster than Spain, which only managed to close that gap in the first quarter of this year.
In addition, Brussels has also updated its inflation forecasts for the six large euro economies. The Community Executive now believes that 2023 will end in Spain with a price increase of 3.6%, which is less than what was expected four months ago and far below the 6.5% hike predicted for the eurozone overall.
Although this data is undoubtedly positive, the EC warns that the second half of the year will be far more difficult as tourism drops off and the demand for Spanish exports diminishes. Added to this complicated scenario is the ECB’s interest rate hikes, which will continue to put pressure on families by increasing the cost of mortgage repayments.
On the other hand, the National Institute of Statistics (INE) has confirmed that inflation has risen for the second consecutive month, thanks largely to the increase in fuel prices. And while grocery costs have moderated somewhat, food is still 10.5% more expensive than it was this time last year.
Image: European Commission
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