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Brussels lowers Spain's GDP forecast of 2018 for the price of oil and the foreign sector

The Commission cuts a tenth of the economic growth forecast, up to 2.8%, after several revisions chained to the upward

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Brussels lowers Spain's GDP forecast of 2018 for the price of oil and the foreign sector

Spain will maintain a robust growth this year compared to or euro zone economies. The anticipated advance is 2.8% in 2018 (one tenth less than forecast in May) and 2.4% for 2019, where re are no changes. The biggest weakness in growth of 2018 is linked to high oil prices and some weakness in external sector. For France, European Commission is expecting a 1.7% increase in GDP this year; For Germany, of 1.9%; For Italy, 1.3%; And for Portugal, from 2.2%.

"Spain's economy grew 3.1% in 2017 and continues to show, until now, little sign of slowdown," says European Commission's analysis. In first quarter of year, compared to previous one, GDP expanded by 0.7%, with no changes since previous two quarters. And indicators, recalls Brussels, point to same trend in second quarter. As Bank of Spain also advanced, " composition of growth in first quarter reveals net exports and a non-construction-related investment weaker than expected, which compensate with strong consumption and construction of Housing ".

In face of full year, it points out that consumption and investment in construction is expected to continue to pull hard from economy. But he warns that " higher rise in oil prices since spring is expected to have a negative impact on demand in 2018 and, to a lesser extent, 2019. Moreover, in a less favourable external environment, net contribution of exports to growth should be a little smaller. "

On side of most positive contributions, Brussels recalls that "additional expansive measures" have been included in budgets of 2018 in Spain. It does not quote m, but accounts included a pension rise of 1.6%, a rise of salaries of officials and some fiscal retouches. Expansive measures, he says, will provide a boost to growth in 2018, mainly through consumption. " Moreover, consumer spending should also benefit from a "higher-than-expected" real wage, as well as dynamics of job creation.

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