The European Commission has increased its forecast for Spain’s economic growth this year to 1.9% from a previous estimate of 1.4% in December.

This follows on from the country’s better-than-predicted performance in Q1. 

Spain’s economy is forecast to grow the most this year within the four major economies in the EU. Growth in Italy is forecast at 1.2%; France at 0.7% and Germany at 0.2%. The average for the EU region is expected to come in at 1.1%. 

The revised growth figure for 2023 has been described as a “magnificent number” by IESE Business School professor of economics, Javier Diaz-Gimenez, adding that “the forecast reflects the reality of a first quarter that went very well, and the start of a second quarter, including an Easter, that went better than expected.” 

Ongoing elevated consumer spending following the pandemic, a comparatively upbeat jobs market and increased tourist revenue all contributed to the enhanced economic performance, Diaz-Gimenez told Xinhua news agency. 

“If we assume Spanish GDP continues to grow at this rate, we could be talking about more than 1.9%,” he stated adding “that's great news” in these volatile and difficult circumstances. 

“So far in 2023 nothing negative has happened to the economy and instead we've seen positive news, which is reflected in the spending and the behaviour of people,” the professor said. 

Nevertheless, he also cautioned of the uncertainty surrounding external economic and political situations. 

“Right now no one can predict what will happen with the Ukraine conflict, or whether there will be more problems with the banks, or any other problem like this,” he added. 

Despite the European Commission upwardly revising Spain’s economic growth forecasts for 2023 and 2024 (2%), the predictions are below the government’s prior growth forecasts of 2.1% and 2.3% for 2023 and 2024 respectively. 

“It's also an election year and so there will be more public spending and more public employment,” Diaz-Gimenez continued.