The Bank of Spain has revised it’s financial forecasts for 2023. The central bank said the global financial sector tensions have created new adverse shock of yet uncertain magnitude and persistence. The Spanish bankers said uncertainty will likely have an adverse effect in the coming quarters and weaken inflation dynamics. They see the 12-month inflation rate falling to 3-4% in March from 6% in February.
Bank of Spain Forecasts
- Sees 2023 GDP growth at 1.6% and 2.3% in 2024
- Cuts 2023 inflation estimate to 3.7% from 4.9%
- 12-month inflation rate could fall to 3-4% in March from 6% in February
Spain Inflation Rate
Spain’s consumer price inflation rate was revised slightly lower to 6.0 percent in February 2023, down from a preliminary estimate of 6.1 percent. This was the highest rate in three months, remaining well above the European Central Bank’s target of 2.0 percent for almost two years.
- Prices rose at a faster pace for food and non-alcoholic beverages (16.6 percent vs 15.4 percent in January), restaurants and hotels (7.9 percent vs 7.8 percent), and miscellaneous goods and services (5.1 percent vs 5.0 percent).
- Prices fell in housing costs, which continued to decline (-6.2 percent vs -8.4 percent) and transport inflation slowed (1.9 percent vs 5.6 percent).
Annual core inflation, which excludes volatile items such as unprocessed food and energy, accelerated to 7.6 percent in February, the highest since the end of 1986.
UK February CPI +10.4% vs +9.9% y/y expected
Prior +10.1%
CPI +1.1% vs+0.6% m/m expected
Prior -0.6%
Core CPI +6.2% vs +5.7% y/y expected
Prior +5.8%
Core CPI +1.2% vs +0.8% m/m expected
Prior -0.9
Looking at the details, the monthly jump owes much to a jump in prices from restaurants and cafes, food, and clothing. This was then partially offset by downward contributions from recreational and cultural goods and services, and motor fuels. From a core standpoint, it is worrying that food price inflation continues to surge higher (as seen below).
U.K.’s February CPI was up 1.1% m/m (expected 0.6%; last -0.6%) and up 10.4% yr/yr (expected 9.9%; last 10.1%). Core CPI was up 1.2% m/m (expected 0.8%; last -0.9%) and up 6.2% yr/yr (expected 5.7%; last 5.8%). February Input PPI was down 0.1% m/m (expected 0.2%; last 0.4%) and Output PPI was down 0.3% m/m (expected 0.2%; last 0.5%).
From The TradersCommunity News Desk