The agency again cuts economic growth forecasts for our country by almost one and a half points to 5.5% of GDP
Until now, there has been a certain consensus among the various economic organizations that inflation would decrease in the second half of the year. However, the OECD points out that prices in Spain will end the year at a whopping 8.1%, five points more than previously forecast. It is a figure comparable to that of the May CPI (8.5%) after falling slightly from the record 9.8% in March, according to data from the INE.
In their new Economic Outlook report, they calculate that Spanish inflation will be one of the highest in the eurozone: France will have 5.2 inflation this year, Germany 7.2%, Italy 6.3% and Portugal 6.3% . Thus, according to the OECD, the Spanish CPI will end the year well above government forecasts (around 6%) and even those of the Bank of Spain (7.5%). Moreover, this is not a specific problem for Spain, but rather prices will remain at 4.8% next year, while in December, before the war in Ukraine broke out, the organization forecast an inflation of 1.5% for Spain in 2023.
And this price hike isn’t just due to the surge in energy products, but the OECD reveals that core inflation—which doesn’t factor in energy prices or fresh food—will end at 4.5% this year. In addition, the organization believes that this rate will remain unchanged next year.
The report indicates that business confidence and household consumption in Spain have “deteriorated” on the back of high inflation, and that both the manufacturing and services sectors have been slowing since March. Of course, the increased influx of foreign tourists, which already reached 84% of the previous year’s spending in March, will allow for a faster-than-expected recovery in the sector.
Source: La Verdad
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