The Bank of Spain prepares a 'slight' upward revision of growth in 2021 and 2022 but fears inflation

The latest revision of the official GDP data carried out by the INE will force the Bank of Spain to modify – once again – its growth estimate. The governor, Pablo Hernández de Cos, has advanced this Wednesday that if there are no new changes by the statistical service, he will undertake a “slight upward revision” of the growth forecasts for 2021 and 2022.

In December, the institution lowered its projections to 4.5% in 2021 and 5.4% in 2022 after the INE surprised with an unprecedented downward revision of the data it had published on the first half of the year . De Cos wanted to take advantage of the meeting with the 200 international investors participating in the Spain Investors Day (SID) to convey this positive message about the Spanish economy. With your new data, it will be possible recover the pre-pandemic GDP level by the end of this year or early 2023.

However, the governor has also been clear in putting on the table the many risks that loom over the Spanish recovery. In particular, he has stopped to talk about the evolution of the omicron variant and inflation.

“These projections are still subject to different elements of uncertainty that will condition the speed and depth of the recovery,” he warned.

Hours before, in this same forum, the Minister of Industry, Reyes Maroto, assured investors that the rebound of the Spanish economy is not “temporary” and that it is going to turn into a “fair recovery”.

Omicron and inflation

Hernández de Cos has been more cautious. “In the short term, the dynamism of the economy will continue to be weighed down due to the extension of the omicron variant, “he warned, before noting that” normality is far from being complete and uncertainty remains high. “

The governor has referred to the effects of this variant of Covid-19 on the economic recovery not only in Spain, but also in the rest of the world, with the impact that new restrictions may have on supply chains.

The other great threat is inflation, which, in addition, he recalled, can affect the most vulnerable very harshly, which contrasts with the discourse of the “fair recovery” of the Executive.

The governor has warned that the Government will have to manage its economic policy and adapt it to the current context of inflationary rebound to support the most vulnerable layers of society, while calling for responsibility to companies and workers with the salary increases in a context of inflation that he insists on describing as “transitory”.

Their forecasts suggest that inflation will continue to rise in the first part of 2022but then it will relax to below 2% at the end of this year. However, if energy prices are not contained and wages rise, feeding back the price rises, there is a risk that this projection will not be fulfilled, he warned.

ECB policy

However, he insisted that the central scenario in which the ECB is moving at the moment is that core inflation (not including energy) will not rise enough to have to announce a rate hike in 2022.

However, Hernández de Cos believes that Spain must do the duties of fiscal consolidation to correct the deficit. To do this, it has called for a multi-year plan that makes it possible to make visible how public accounts will be balanced when the economic situation normalizes and the pandemic is left behind.


Together with the governor, the president of the CNMV participated in this last session of the first day of the SID, Rodrigo Buenaventura, which has defended the need to continue betting on an open market to boost the Spanish economy and has highlighted the role of financial markets in economic growth.

Buenaventura has also defended the need to to further promote market financing in Europe As a complement to the bank and in this sense, it has celebrated the advance of the number of companies listed in the Spanish alternative market throughout 2021. However, it has indicated that more companies need to be listed and has highlighted the key role of foreign investment for our economy.

Before his words, the president of BME (Six), Jos Dijsselhof, has highlighted the role that the Stock Market has played during the pandemic, since the markets have been open despite the restrictions and have allowed companies to raise financing. In addition, he recalled some data on the movements in Spain in 2021, including the good data on capital increases, with more than 19,800 million raised by companies in the Spanish market last year.

On Wednesday’s session, closed by the Foreign Minister, José Manuel Albares, who highlighted the role that European funds and the reforms undertaken by the Government will play in the economy. The fourth vice president, Teresa Ribera, also attended the forum to answer questions from investors about the ecological transition.

The meeting will be closed on Thursday by the President of the Government, Pedro Sánchez, who will participate after the first vice president, Nadia Calviño.

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