Spain’s central bank announced on Tuesday that the country’s economy is expected to grow between 0.5% and 0.6% in the second quarter, maintaining the expansion momentum from the previous quarter’s 0.6% growth.
Revised Growth Projections
On Monday, Bank of Spain Governor José Luis Escrivá adjusted the country’s annual growth forecast downward to 2.4%, from the previously anticipated 2.7%. Despite this revision, Spain’s growth rate remains significantly higher than the eurozone average. Governor Escrivá attributed the downward adjustment to persistent global trade tensions.
The central bank’s comprehensive report released Tuesday projects a gradual economic slowdown in the coming quarters. This forecast incorporates potential positive effects from anticipated increases in EU defense and infrastructure spending.
Analytical Framework
Bank of Spain Chief Economist Ángel Gavilán clarified that these projections were calculated under a central scenario assuming:
- The United States implements 10% tariffs on European goods
- Europe does not retaliate against these tariff measures
This baseline scenario reflects the bank’s cautious approach to economic forecasting amidst ongoing international trade uncertainties. The projection of continued but slowing growth suggests Spain’s economy remains resilient despite external pressures, though at a more moderate pace than previously expected.
The central bank’s analysis indicates that while global trade tensions pose challenges to economic expansion, domestic factors and potential EU-level stimulus measures may help mitigate the slowdown’s severity in the coming quarters.
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