By Jesús Aguado and Emma Pinedo

MADRID, Reuters – Supply bottlenecks and rising inflation could cause a slowdown in Spanish economic growth, Pablo Hernandez De Cos from the Bank of Spain said Tuesday.

These recent events were expected to cause a “significantly downward” revision to the bank’s forecasts for Spain’s economy growth in 2021. The December update will be made and it could also impact the 2022 forecast.

These projections show that pre-pandemic levels would not reach the economy until 2023.

De Cos indicated that the pre-pandemic tourism levels, at more than 12 percent of Spain’s total GDP, won’t be reached until the summer 2023.

Spain’s chief central bank official said also that economic prospects for the next months will depend on household consumption strength and implementation of European Recovery loans.

He told the members of Parliament during a hearing of the budget commission that although the recovery expectation is realistic, it’s speed and depth can be subject to high levels of uncertainty.

The Spanish economy is recovering from a 10.8% plunge last year. But, the recovery has been slower than predicted.

Although the European Commission projects that Spain will grow by 5.5% next year, as opposed to 6.3% in previous years, the government is sticking to its optimistic forecast of 7% growth.

The Spanish inflation reached its highest point in almost 30 years in November due to an increase in fuel prices and food prices. Consumer prices rose by 5.6% annually.

This rate rose from 5.4% in October to 5.8% in September 1992. The euro area has seen inflation rise in the last months. Spain is particularly affected.