this Bank of Spain It predicts the economy will grow slightly above the Government’s forecasts in 2022, but will do so in 2023 with much less intensity than the Executive envisioned to build the Budget project. The Bank of Spain in its quarterly report reviewing the economic outlook released this Wednesday raised its forecast to 4.5%. GDP growth for this year (four-tenths above the previous estimate for June and one-tenth above the Government’s estimate) but lowers its estimate for 2023 to 1.4% This estimate is less than half what the Government itself had expected in June (2.9%) and the Bank of Spain (2.9%) for next year. significantly below the Government’s forecast, which cut its outlook from 2.7% to 2.1% on Tuesday.
Improved its forecasts, the Central Bank of Spain said, “The GDP of the Spanish economy, which grew by 4.5% this year, is expected to slow down to 1.4% in 2023 and to continue more dynamism by increasing 2.9% in 2024”. four of them. The improvement in the 2022 forecast is explained above all by “positive surprise”. Although contributing to the second quarter of the year in terms of growth (at an unexpected rate of 1.5%) and only 0.1% increase is expected for the third quarter.
In the context of high uncertainty, due to the energy crisis caused by the war in Ukraine, the growth model the organization sees includes the possibility of more dynamism in the economy. starts next spring if the scenario of price smoothing and gradual reduction of the bottlenecks in the international supply chain and the economic consequences of war is approved.
The new perspectives of the Bank of Spain delay the recovery of banks to the beginning of 2024. GDP level before Pandemic, A situation that is already occurring in the rest of the eurozone in the first quarter of 2022. In any case, in the central scenario of the organism, the Spanish economy surviving the recession scenario, According to Ángel Gavilán, managing director of Economics and Statistics.
higher inflation
In the report prepared by the body chaired by Pablo Hernández de Cos and which will form the basis of the future prospects of the European Central Bank – predicts it will inflation In 2022 it will average 8.7% this yearTo 5.6% in 2023 and 1.9% in 2024, all are in the uncertainty that is currently driving the setting of perspectives. Average inflation for 2022 was adjusted upwards by 1.5 percentage points, compared to what the Bank of Spain expected in June; In the case of 2023, it reached 5.6%, adding 3.1 points, more than double the June forecast; The average inflation forecast for 2024 was revised up one-tenth (to 1.9%).
The agency calculates that the measures taken by the Government to limit the rise in energy prices made it possible to subtract 3 percentage points from the 10.4% inflation rate in August, otherwise it would have remained at 13.4%. It is estimated that the contribution of the mechanism that will limit the price of gas used in electricity generation to this moderation is over 1 point. The Bank of Spain expects the impact of the measures to contain inflation to be even greater in September and October, following the introduction of discounts in public transport and the lowering of VAT on natural gas.
public deficit
The report released by the Bank of Spain this Wednesday does not yet include the figures put forward by the Government regarding the following into the analysis assumptions. 2023 budget project, Although it is taken into account in the calculations review of pensions according to inflation determined by law. Based on these premises, the Bank of Spain report predicts that the public deficit will fall to 4.3% of GDP this year and 4% in 2023, then rise again to 4.3% in 2024. As a starting point, an increase in pensions of about 8.7% in 2023.