MADRID—Spain’s economy keeps accelerating and may grow 0.8% in the first quarter of this year from the last quarter of 2014, as lower consumer prices drive internal demand, the country’s central bank said Thursday.

The eurozone’s fourth-largest economy is likely to grow 2.5% on an annual basis in the first quarter, the Bank of Spain said in a monthly report. The bank also raised its forecast for economic growth this year to 2.8% from 2% previously. In 2016, the central bank said it expects the economy to grow 2.7%.

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