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Spain's Macroeconomic & Financial Outlook

Spain's Macroeconomic & Financial Outlook

Monthly analysis of Spain’s economic and financial outlook and its long-term prospects. The European energy crisis has worsened. Gas prices increased significantly during August and in early September Russia has cut gas supplies to Europe indefinitely. Gas prices in future markets average c.200€/MWh for 2023 (compared to 150€ at the end of July). GDP in Spain surprised on the upside in Q2 2022 and grew 1.1% qoq (6.3% yoy) with a solid breakdown. The main engines of growth were private consumption and investment. GDP remains 2.5% below the pre-pandemic level (Q4 2019). The macroeconomic scenario is under revision to account for higher gas prices and, as a result, higher inflation and a more aggressive ECB going forward. […]