slow down The emphasis is on the Spanish economy for the next year. Organization for Economic Co-operation and Development (OECD), reduced by five tenths Growth forecasts for Spain and predict that Gross Domestic Product (GDP) will grow by: 1.4% in 2024Instead of the 1.9% forecast in September. According to the quarterly report published this Wednesday by the international organization headquartered in Paris, Spain’s GDP will increase by 2.4% this year, the same forecast it made in September. However, in 2024, the growth rate will slow down and lose one point. A recovery to 2% is predicted in 2025.
The decline in Spain’s growth next year is in line with forecasts made by other national and international organisations. The Spanish Chamber of Commerce this Monday lowered its forecast to 1.6% of GDP in 2024, while the European Commission stated that it expects an increase of 1.7% in October. On the other hand, the Spanish Government is more optimistic and hopes to grow by 2%.
Above the euro area average
However, Spain remains the largest country in Western Europe. better resists the current economic slowdownespecially in the Old Continent. Its economy is clearly growing above the eurozone average (0.6%) this year, and the same will happen in 2024.
german economyActually, will decrease this year (-0.1%) and will only increase by 0.6% next year. France will also have weak growth in both 2023 (0.9%) and 2024 (0.8%). The same goes for Italy (0.7%) or the Netherlands (0.5%). Only Ireland, Greece, Croatia and the Baltic states will be able to rise above Spain’s parameters.
After the inflation crisis and the repercussions of the war in Ukraine, which especially affected the economy of Germany, the economic engine of the European Union, the GDP of different countries of the bloc is now visible. suppressed by monetary policy European Central Bank and higher interest rates to combat inflation. This has implications for sectors such as construction and finance.
Europe’s growth lags behind
OECD warns decrease inflation will be slower than expected globally, this “limits the possibility of interest rate cuts in 2024.” According to the report of this organization, the price increase in G20 countries will increase from 6.2 percent in 2023 to 5.8 percent in 2024. “The impact of rising interest rates and tightening credit standards may be stronger than expected, leading to a sharper slowdown in spending and unemployment increase“, To add.
In the case of the USA, “there is a risk that inflation will be permanent”, while in Europe there is a more significant slowdown and the possibility that growth will lag behind other powers. US economy better resists slowdown It is higher than in Europe, and GDP is expected to grow by 2.3% this year. Chinese will increase by 5.2 percent in 2023 and 4.7 percent in 2024.
Adding to the slowdown, OECD chief economist Clare Lombardelli said increase in public deficits The rising cost of debt due to high interest rates is leading to greater spending on pensions due to the aging of the population, as well as an increase in military spending and investments to combat the climate emergency. The organization predicts a public deficit for Spain 3.2% in 2024 and 3.1% in 2025. Some percentages are slightly higher than those set by the controversial European rule.