Spain's central bank ups 2017 growth forecast

MADRID: Spain's economic growth will be stronger than predicted in 2017 but the country's public deficit will overshoot what Madrid promised to the European Union, the central bank said Monday.

In a statement, the bank said Spain's economy would grow 2.8 percent this year, faster than the 2.5 percent it had previously anticipated.

"The economy has in the first months of 2017 performed better than anticipated in December," it explained.

After a severe crisis sparked when a property bubble burst in 2008, Spain is on the road to recovery, and registered growth of 3.2 percent last year, double the eurozone average.

But on a more pessimistic note, the central bank said it foresaw that Spain's public deficit would drop only to 3.3 percent of economic output this year -- higher than the 3.1 percent Madrid has promised Brussels.

Spain has repeatedly overshot its public deficit target as it tries to go below an EU-imposed ceiling of 3.0 percent.

In August, after it became apparent the country would once again be unable to meet its target, the EU gave Spain an two extra years to bring its deficit to below the ceiling.

It then agreed to a deficit of 3.1 percent in 2017 and 2.2 percent in 2018.

Where growth is concerned, the central bank said Spain's economy would continue onwards and upwards until at least 2019.

But it warned that a potential rise in interest rates, a risk of increased protectionism around the world, as well as uncertainty linked to Brexit and upcoming elections in Europe could weigh on growth.