1. We have a positive outlook for consumer spending in 2022. The growth in spending will be due to an improving epidemiological situation which is resulting in Covid-19 related restrictions being lifted, particularly as Spain has made significant progress with its vaccine rollout. A tightening labour market as economic activity increases will further support consumer spending over 2022. 2. That said, we note that inflation has been rising in recent months, exacerbated by increasing food and fuel prices amid the Ukraine - Russia conflict. This is a downside risk to our outlook for consumer spending growth over 2022 as it is weighing on purchasing power. This is being reflected in high frequency data, particularly consumer confidence which remains low despite improving as high inflation remains a concern for consumers.
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