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Bank of Spain cuts economic growth outlook through 2021

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By Reuters

MADRID (Reuters) – The Bank of Spain sharply lowered the country’s economic growth outlook for this year on Tuesday on weaker investment and private consumption and saw the expansion slowing down in the third quarter to 0.4% from 0.5% in the previous three months.

In its economic outlook for 2019-2021, the central bank put this year’s growth at 2%, below its previous estimate of 2.4% released in June and down from last year’s recently revised growth of 2.4%, citing also a change in the methodology of how Spain calculates its gross domestic product.

It also trimmed its macroeconomic projections to 1.7% growth next year and 1.6% in 2021 from the previous forecast of 1.9% and 1.7% respectively.

“The base case scenario of economic activity evolution is subject to significant downward risks,” the Bank of Spain said, referring to a slowdown in Europe and global challenges such as a potential hard Brexit and trade tensions between the United States and China.

(Reporting By Jesus Aguado, writing by Andrei Khalip, edited by Andres Gonzalez)