8.1% this year and still at 4.8% in 2023

The Organization for Economic Cooperation and Development (OECD) forecasts persistent inflation in Spain due to the impact of Russia's invasion of Ukraine. The agency estimates that prices rise 8.1% this year on average and even continue to increase by 4.8% in 2023according to the updated outlook report released on Wednesday.

Families begin to cut spending to withstand inflation

Know more

In this document, the OECD also lowers the economic growth forecast for our country to 4.1% in 2022, 1.4 points below the pre-war expectation. The Government reduced from 7% to 4.3% yours at the end of April. The estimate for 2023 changes to a GDP (Gross Domestic Product) advance of 2.2%, from the previous 3.8%.

The OECD has decided to undertake these reductions in growth forecasts due to the high uncertainty, inflation and the slowdown in external demand.

From a positive point of view, the Paris-based body has highlighted saving of homes, the fiscal stimulus package against the effects of the war, the "continued recovery" of employment and European funds as aspects that will boost economic growth.

Lower cut than in the rest of Europe

"The war in Ukraine is affecting the Spanish economy through higher energy prices, interruptions in production chains and greater uncertainty, since direct trade and financial exposures to Russia and Ukraine are limited", underlines the OECD.

Due to the lower exposure to Russia, the cut in Spain's forecasts compared to December's projections is less than that suffered by the rest of the large euro economies. In this way, the prospects for Germany have been cut by 2.2 percentage points, to a GDP growth of 1.9% in 2022; while France will grow by 2.4% (1.8 points less) and Italy, 2.5% (2.1 points less).

Source link