MADRID has cut its economic forecast for Spain following a delay in funds from the EU.
Officials in Madrid have cut Spain’s economic forecast due to delays in EU funding.
The Bank of Spain has announced the country’s economy is likely to shrink by 0.4 percent this quarter after two straight quarters of recovery due to restrictions imposed to tackle the third wave of Covid infections.
The bank has lowered its growth forecast as the country waits funds from the EU.
The news come after experts said Spain’s economy will improve later this year.
The Organisation for Economic Co-Operation and Development (OECD) said experts believe Spain’s economy will improve this year.
The organisation, which believes there could be GDP growth up to 5.7 per cent this year, said it believes vaccinations will allow restrictions to be lifted and demand to increase.
The OECD said it thinks Spain will recover after its economic downfall last year became the largest in the Euro zone.
Its GDP projections are now in line with those from the European Commission, but are behind those from Spain’s central government, which suggest the country’s GDP will grow by 7.2 per cent this year.
The OECD said: “There are still considerable risks, but rapid progress in the vaccination process will allow the restrictions to be lifted faster and improve the confidence and spending of citizens.”
It warned a slow vaccine rollout might mean, “a weaker recovery, with greater job losses and more commercial failures.”
The body said Spain should now speed up its vaccinations if it wants to continue to improve the country’s economy.
Spain is now expected to be the country with the biggest economic growth this year after France, whose economy is expected to grow by 5.9 per cent.
Germany will stay with a growth of 3 per cent this year, while Italy will grow by 4.1 per cent.
The UK’s economy is also expected to improve later this year.
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