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The Bank of Spain announced on Tuesday that it revised its 2021 Gross Domestic Product (GDP) growth forecast down to 6% from 6.8% predicted in December, as reported by Reuters.

The bank noted that a slower-than-expected arrival of the EU rescue funds in 2021 is likely to weigh on growth before boosting investment next year.

Additional takeaways

“Bank of Spain sees the country’s economy shrinking by 0.4% in Q1 from the preceding quarter (+0.4%) in central scenario, range from -0.9% to +0.4%.”

“Bank of Spain sees EU-harmonized inflation at 1.4% this year (previous forecast 0.6%) , 0.8% in 2022, 1.2% in 2023.”

“Bank of Spain sees unemployment this year at 17% vs 18.3% in December estimate.”

Market reaction

The EUR/USD pair showed little to no reaction to this report and was last seen losing 0.35% on the day at 1.1890.