MADRID (Reuters] – Spain’s economy may grow slower than previously forecast at 4.5% this year, as higher inflation negatively impacts consumers confidence, Pablo Hernandez de Cos from the Bank of Spain said Wednesday.

Spain’s central banking had in April reduced its economic growth forecast for next year due to inflation caused by Russia’s invasion Ukraine. They also predicted that inflation will rise to 7.5% in 2022.

De Cos stated that “new information, including lower than expected GDP growth for the first quarter of the year, will, absent additional shocks,” de Cos added.

Spain saw a sharp drop in growth to 0.3%, compared to the expected 0.3%. This led to the government reducing its outlook for growth to 4.3% instead of 7%.