The Bank of Spain increased its 2015 growth forecast as domestic demand gathers momentum, Governor Luis Maria Linde said Wednesday.
The Spanish economy will grow 3.1 percent this year, compared with the previous projection of 2.8 percent, Linde said in a speech to a parliamentary committee in Madrid. He maintained the Bank of Spain’s estimate of 2.7 percent for 2016.
Spain’s expansion is outpacing most of the euro area, propelled by lower oil prices, a weaker currency and European Central Bank stimulus is bolstered by pre-election tax cuts. The economy probably grew as much as 1 percent in the second quarter, Linde said.
“The forecasts for what remains of the year and for next point to the maintenance of elevated dynamism, clearly superior to that of the majority of our partners in the euro area,” Linde said in his speech.
Linde said inflation, which has been negative, could end the year above zero as the impact of lower fuel prices wanes. He said the economy may see lending increase for the first time since 2009 this year.