Pablo Hernández de Cos, governor of the Bank of Spain; European Central Bank (ECB) vice president Luis de Guindos; and even former first vice-president and Minister of Economy Nadia Calviño, president of the European Investment Bank (EIB). Everyone agrees that: There will be a massive slowdown in the Spanish economy in 2024, but no one predicts a recession or crisis. In fact, despite the slower pace of activity, the Spanish economy will outperform the Eurozone average in growth.
The last country to revise its forecasts downwards (and upwards to 2.4% for 2023, as all research institutions do) was the Bank of Spain, which set its forecast at 1.6%. In any case, it’s about Twice the activity rates in the Eurozone0.6% in 2023 and 0.8% in 2024.
As the year progressed, different organizations and labor services adjusted their growth forecasts. Recovery for 2023 is over 2%especially thanks to the shooting in the first trimester; The Spanish Chamber of Commerce warns of a deterioration of well below 2% for next year, as it will lose some of the driving forces it has had so far, such as the external sector.
The government has set its forecast at 2.4% for this year and 2% for next year. He is overly optimistic for next year, according to the main research services.
As for 2023, most forecasts coincide with upward revisions. Fiscal year 2023 is off to a strong start, with GDP increasing by 0.6% in the first quarter compared to the last quarter of 2022, and at an annual rate of 4.1%. However, all of this slowed down and the increase in the economy in the July-September period was 0.3% compared to the second quarter and 1.8% compared to the same period of the previous year.
In one of his last interventions as a member of the Board of Directors, Calviño admitted that uncertainties remain due to geopolitical instability and technological and climatic transformations that his successors will have to deal with.
But he emphasized the “extraordinary dynamism of the labor market.” membership records Social SecurityMore than 21 million jobs, as well as “a significant decline in the temporary employment rate and an increase in employment and wages in the highest productivity sectors.”
In 2024 the Spanish economy will see affected by the impact of the rise. interest ratesThe practice launched by the European Central Bank (ECB) in July last year in order to reduce inflation to around 2 percent. In any case, in Spain the rate had already fallen to 3.1% in December; This rate is almost half of the 6% it reached in February.
According to analysts, the inflation will continue to hinder activities“Although to a lesser extent than in the last two years,” according to CaixaBank Research. And this trend appears to be accelerating. It will also affect low growth in the euro zone, with which Spain maintains most of its trade relations.
Another indicator used as a reference is the one prepared by the ‘think tank’ Funcas from old funds grouped in CECA, which summarizes the forecasts of 19 labor services and gave an average of 2.4% in November. 1.6% in 2023 and 2024.
Higher estimates for 2023 are 2.5% and 2.1% for 2024The minimums are 2.3% and 1.2% respectively. They predict that there will be equal growth in private consumption in 2023 and 2024, while there will be a decrease in public consumption in this new year. On the other hand, investments will increase.
The OECD, which groups industrialized countries, confirmed that there will be a slowdown in Spain until 2024, as in all developed economies, but underlines the following: pace of activity will remain “robust”. According to the International Monetary Fund (IMF), in any case, both the impact of increases in money prices and the decrease in global trade will have negative effects.
The European Commission speaks along the same lines, but emphasizes: Spain will continue to grow above the euro zone average. However, he is concerned about the public deficit, which, in his opinion, will remain above 3% of GDP. Although the government expanded the scope of various anti-crisis measures, from public transport bonuses to the removal of VAT on basic products, it planned to close 2023 at 3.9% and 2024 at 3%, with the cost estimated at around 5.3 billion. This will be the biggest challenge for the economic team, which will be led by the first vice president of the Minister of Finance, María Jesús Montero, and supported by the new head of the Economy, Carlos Body.
For the consumer price index (CPI), the average forecast of different organizations was 3.7% in 2023 (closed at 3.1%) and 3.3% in 2024. As for the underlying inflation, which is the most structural, as it excludes such variable factors as unprocessed food or energy, the forecast is 5.9% this year (closed at 3.8%) and 3.3% next year.