December 15, 2017 / 9:35 AM / a year ago

Bank of Spain cuts 2018 growth forecast on Catalonia uncertainty

MADRID, Dec 15 (Reuters) - The Bank of Spain cut its economic growth forecast for 2018 and 2019 slightly on Friday due to uncertainty over the northeastern region of Catalonia which will hold an election on Dec. 21 after losing its autonomy following an illegal vote on secession.

Spain’s economy will grow by 2.4 percent next year and 2.1 percent in 2019, the central bank said, down from previous forecasts of 2.5 percent and 2.2 percent.

“The effect of political uncertainty surrounding Catalonia constitutes a an additional condition in the evolution of the Spanish economy throughout the time frame under consideration,” the bank said adding that was partially offset by improved market expectations, especially within the euro zone. (Reporting by Paul Day; Editing by Sonya Dowsett)

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