Madrid, Spain (AFP) – Spain’s central bank raised its 2024 growth forecast by 0.3 percentage points on Tuesday despite the impact of the devastating October 29 floods, the country’s worst such disaster in decades.

The Bank of Spain predicted in a report that gross domestic product in the European Union’s fourth-largest economy would grow by 3.1 percent this year, an increase of 0.4 percentage points on 2023.

The floods killed 231 people and laid waste to swathes of the eastern Valencia region, an industrial and agricultural powerhouse and home to one of Europe’s busiest cargo ports.

Bank of Spain governor Jose Luis Escriva estimated last month that the costly damage to homes, businesses, infrastructure and fields could shave up to 0.2 percentage points off growth in the final quarter.

But in its latest report the bank said the catastrophe would only “weigh down slightly on activity”, slowing final-quarter growth by between 0.1 and 0.2 percentage points.

“The uncertainty surrounding this estimate is high due to the difficulty in assessing the impact” of the floods, it wrote.

The improved forecast for 2024 is based on an acceleration of the economy in the second half of the year that exceeded expectations and fresh data published by the National Statistics Institute.

Spain’s economy has been growing faster than the eurozone average this year after recovering from the Covid-19 crisis, providing vital political oxygen to the often beleaguered minority left-wing government.

The bank also increased its growth forecast for 2025 by 0.3 percentage points to 2.5 percent.