MADRID - The Spanish government slashed this year's economic growth outlook to 4.3% from 7% on Friday after reporting a sharp slowdown in the first quarter due to the negative impact of soaring energy prices prompted by Russia's invasion of Ukraine.

In a presentation to reporters, Economy Minister Nadia Calvino attributed the outlook's downgrade to "the international situation due to the impact of energy and the poorer growth prospects of our main export markets".

Spain's economy expanded by a weaker-than-expected 0.3% in the first quarter from the previous three months, when growth was 2.2%, as the conflict in Ukraine and the ensuing energy shock weighed on global growth.

Nevertheless, Economy Minister Nadia Calvino expected inflation to decelerate further after hitting a near 40-year high in March to return to 2% next year. Spanish 12-month inflation slowed to 8.4% in April from 9.8% the previous month.

Despite the weaker growth forecast, the government still hopes to reduce the budget deficit this year to 5% of gross domestic product (GDP), from 6.9% in 2021, thanks to higher tax collection, Budget Minister Maria Jesus Montero said, and then bring it down to 3.9% in 2023.

Analysts polled by Reuters had expected GDP to rise by 0.5% in the first quarter from the previous three months.

Spiralling inflation, exacerbated by the Ukraine crisis and a Spanish truck drivers' strike in March, dragged down household spending by 3.7% over the quarter, the National Statistics Institute data showed.

On an annual basis output expanded by 6.4%, roughly in line with a Reuters poll for 6.5% growth as the economy rebounded from the first quarter of 2021 when Spain was buffeted by a huge snowstorm that paralysed the centre of the country for a few days in January.

(Reporting by Nathan Allen and Inti Landauro, Editing by Andrei Khalip and Gareth Jones)