! Spanish News Today – War in Ukraine drives Spanish inflation higher and lowers economic growth

Publication date: 04/20/2022

Inflation in Spain is expected to reach 5.3% while GDP will grow at a slower pace

In its first projections since war broke out in Ukraine, the International Monetary Fund (IMF) predicted that the Spanish economy would grow less this year than expected and that consumer costs would rise by 5.3%.
Before the Russian invasion in February, the IMF estimated that the economy would grow by 5.8%; however, that figure has now been revised down to just 4.8%. The Bank of Spain is even less optimistic, suggesting that inflation will reach 7.5% by the end of 2022.

While the Spanish government itself will not update its forecasts until the end of this month, President Sanchez has already confirmed that “a downward revision to Spain’s GDP growth figures” is inevitable, while assuring that this “does not mean that Spain is not going to continue to grow.

On the other hand, the IMF estimates that Spain will be one of the European countries whose economies will experience the strongest growth this year and next year. However, this is also relative as Spain recorded the biggest economic collapse of any advanced country in 2020 and grew below the European average last year.

While no financial analyst is predicting a recession beyond the countries directly involved in the war, the IMF is clear that the conflict will contribute to a significant slowdown in global growth in 2022.

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