MADRID: Spain's central bank Thursday raised its forecast for the country's economic growth in 2015 to 2.8 percent, citing emergency liquidity measures, a weakening euro and lower oil prices.
The Bank of Spain's latest quarterly forecast brightened the outlook further after several years of recession, outstripping the government's current forecast of 2.4 percent growth.
The bank raised its own growth estimate for the eurozone's fourth-biggest economy from 2.1 percent previously.
The increase was prompted by "a slight acceleration of activity" which boosted household spending compared with the last quarter, the bank in a statement.
It was driven by "the improvement in financing conditions after the expansion of the European Central Bank's bond programme, the weakening of the euro exchange rate and the fall in the oil price".
The ECB in January launched a massive drive to buy bonds in order to pump liquidity into the financial system and kick-start lending.
The Spanish central bank forecast that growth would slow slightly to 2.7 percent in 2016.
Spain's conservative government says the economy is on the road to recovery after emerging from recession in mid-2013.
It expanded by 1.4 percent in 2014 -- the first full year of growth since Spain's property sector collapsed in 2008.
That bust threw millions of people out of work. The unemployment rate was still an extremely high 23.7 at the end of 2014 and the central bank and government forecast it will stay above 20 percent next year and in 2016.
In the crisis the government pushed through unpopular spending cuts to stabilise the public finances under pressure from European authorities.
In a key measure of financial stability, the Bank of Spain estimated that Spain's public deficit was in line with the government's target at 5.5 percent of output in 2014.
The deficit would ease further to 4.5 percent in 2015, a sign of improving financial strength, it said.
The government has promised EU authorities it will bring the deficit down to the European Union's limit of three percent of output in 2016, but the Bank of Spain forecast it would miss that target.
It forecast a deficit of 3.9 percent of output for next year.
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