MADRID, April 10 (Xinhua) — The Governor of the Bank of Spain, Jose Luis Escriva, announced on Wednesday that the central bank will revise its forecast for Spain’s economic growth downward, citing the impact of new U.S. tariffs on European goods.
In March, the Bank of Spain projected that the country’s gross domestic product (GDP) would expand by 2.7 percent in 2025. However, speaking during an interview on Spanish National Television (TVE), Escriva said, “We will have to revise our growth forecasts downwards,” adding that this is “the logical step” in light of the newly imposed 20 percent tariff on European Union (EU) goods and 25 percent tariffs on steel, aluminum, and automobiles from the 27-nation bloc.
While Escriva did not provide a specific figure for the anticipated downgrade, he acknowledged that the central bank’s earlier projections had already warned that “tensions and growing uncertainty could have a significant adverse effect on economic activity,” identifying them as key “downside risks.”
“We know that what is happening has the potential to generate very negative effects on global economic activity in a highly asymmetric manner,” Escriva explained. “But it’s also true that we currently lack the precise data to fully understand what will unfold, or in what sequence.”
He described the tariffs as “very harsh,” warning they are already “affecting supply” chains and have the “potential to trigger further contractions in economic activity or lead to a slowdown.”
Despite the deteriorating outlook, Escriva emphasized that he does not foresee a recession. “Any revision we make will be subject to a very high level of uncertainty,” he concluded, “but I would not speak of a recession under any circumstances.”
