In its quarterly macroeconomic projections, the Bank of Spain revised the 2023 growth forecast to 1.3% from 1.4% previously. The bank sees Gross Domestic Product (GDP) growth of 2.7% in 2024 and 2.1% in 2025.

In the fourth quarter of the year, the bank expects the economy to expand only by 0.1%. "Weak consumption is one of the main factors behind the modest GDP growth forecast for the fourth quarter," the bank explained in its publication.

Finally, the bank forecasts the annual HICP inflation to decline to 4.9% in 2023 and 3.9% in 2024 from 8.4% in 2022. 

Market reaction

The EUR/USD pair showed no immediate reaction to this publication and was last seen rising 0.25% on the day at 1.0633.