this European macroeconomic scenario darkens. While this year’s growth will finally be higher than predicted three months ago, Russia’s war in Ukraine, its impact on world demand, the energy crisis and the rise in inflationary pressures predict a much more complex 2023. Weaker growth prospects and higher-than-expected inflation This will put the EU and the Eurozone into recession. It is a situation that will harm the Spanish economy. According to the new autumn forecasts, Spain will grow 4.5 percent this year however Only 1% will do this in 2023in front of 2.1% It is projected in July before accelerating to 2% again in 2024.
In this slowdown and recession environment, the Spanish economy will maintain a certain strength. This year will grow 4.5%, half a percentage point more than community technicians predicted last July, and one tenth of what State Pedro Sanchez’s photo. Y Although it will close this year in the red with a 0.3% contraction in the last quarter, Spain’s economy will be the only one among the euro’s major powers to avoid a technical recession, as the European Commission predicts slight progress. 0.1 percent in the first quarter of next year Despite a massive slowdown, Spain as a whole will grow by 1% in 2023, tripling the Euro Area average (0.3%), and well above other major economies From the EU: Germany (-0.6%), Italy (0.3%), France (0.4%) and the Netherlands (0.6%). “In an uncertain context where forecasting is complex, the Commission expects Spain to grow clearly above the eurozone as a whole in both 2022 and 2023. Next year only Ireland, Malta and Romania will outgrow Spain” Ministry, following the publication of the European Commission’s new estimates.
According to Paolo Gentiloni, Commissioner for Economic Affairs, “pressures from high energy prices are expected to ease somewhat from mid-2023. gradual rebound in activity thanks to a moderate revival of private consumption and further normalization of tourism”. All this is a harbinger of stronger growth in 2024, thanks to stronger domestic and foreign demand.
The labor market resists
The new picture also confirms that Spain will continue to create jobs next year (0.8%), above the Government’s forecast (0.6%) and well above other Eurozone countries (0.1%). this unemployment rateHowever, it will remain stable at 12.7%, half a point above the Government estimate and higher than the 7.2% that the Eurozone will register in 2023.
Similar European Commission estimates inflation has not yet peaked and the summit will not be reached until the end of the year. According to his forecast, it will reach 9.3% in the EU and 8.5% in the Eurozone this year before starting to decline in 2023, but will remain high (7% in the EU and 7% in the Eurozone) 6.1). An upward revision that Brussels attributed to the significant rise in wholesale gas and electricity prices, which put pressure on retail energy prices as well as most goods and services in the consumer basket. In the case of Spain, forecasts project a much more moderate 4.8% price index in 2023, even below the Bank of Spain’s 5.6% forecast. However, this year it will reach 8.5%.
More deficit and debt
Low growth, high inflation and energy support measures will also put pressure on deficits. The strong nominal growth of the first three quarters of the year and the removal of pandemic-related benefits resulted in a further reduction in public deficits in 2022, despite new measures taken to mitigate the impact of the rise in residential energy prices. and businesses. After falling to 4.6% of GDP in 2021 (5.1% in the euro area), EU deficit expected to continue to fall to 3.4% of GDP this year (3.5% in the euro area).
However, in 2023, the public deficit will rise slightly again (to 3.6% in the EU and 3% in the euro area) as economic activity weakens, interest spending increases, and governments expand or introduce new discretionary measures to mitigate the impact of high energy. to 7). Price:% p. In the case of Spain, Brussels estimates project a 5% deviation in public finances this year, 3.9% in 2023 and 2.9% in 2024; linking pension to inflation It will focus on 2023 budgets (at an estimated cost of 1.4%).
According to the European analysis, the measures put in place by the Government to mitigate the impact of high energy prices account for 1.6% of GDP. Some of these, such as the reduction of VAT on electricity and gas or some exemptions or reduction of special tax on electricity.will have negative effects on revenueOthers, such as lowering 20 cents per liter for gas, a social check to help warm, or helping the most disadvantaged households, “will mean increased spending.”
By Public debt in the EU will fall from 89.4% in 2021 to 84.1% in 2024, and in the euro area from 97.1% to 91.4%. It will also fall in Spain, although it remains above the 100% threshold: 114% in 2022, 112.5% in 2023 and 112.1% in 2024. The Spanish Ministry of Economy supports the European Commission’s Government fiscal projections “with an estimate of public debt at the end of 2023 identical to that of the PGE, and a deficit reduction that would allow it to fall below 3% of GDP in 2025”.
Forecasts continue to be surrounded by enormous uncertainty. Firstly, because Russia’s war in Ukraine continues, and secondly, because the possibility of further economic disturbance has not disappeared. In fact, the biggest threat according to Brussels is the negative developments in the gas market and the risk of supply problems especially in the winter of next year, not to mention the possibility of further disruption in other commodity markets due to geopolitical tensions. . Another important risk factor is longer-term inflation and possible erratic adjustments to the new high interest rate environment in global financial markets. It warns the Commission that both are further strengthened by the potential inconsistency between fiscal and monetary policy targets.
Source: Informacion
Christina Moncayo is a contributing writer for “Social Bites”. Her focus is on the gaming industry and she provides in-depth coverage of the latest news and trends in the world of gaming.