According to the Organization for Economic Cooperation and Development and its Economic Perspectives briefing, global macroeconomic projections have been revised downward to reflect the ongoing impact of the conflict in Ukraine on economies worldwide.
In the case of Spain, the OECD trims its GDP growth forecast to 4.1 percent, a pullback of 1.4 percentage points from the 5.5 percent forecast issued in December. The 2023 growth outlook is revised to 2.2 percent, down from 3.8 percent. The downgrade stems from heightened uncertainty, ongoing inflation, and softer foreign demand affecting the Spanish economy. Yet the organization also notes several offsetting factors that may support growth, including resilient household savings, a fiscal stimulus package aimed at countering war-related pressures, a gradual strengthening of employment, and the continued deployment of European funds.
Average 8.1% inflation
For the year 2022 in total, the OECD projects an average inflation rate of 8.1 percent, which is several points above the 3.2 percent forecast published in December. The forecast for 2023 shows price growth easing to 4.8 percent, still higher than the 1.5 percent anticipated earlier in the year. The OECD’s last macroeconomic update notes that the war in Ukraine has exerted upward pressure on energy costs, disrupted supply chains, and added uncertainty, translating into higher living costs and greater volatility for Spanish households and businesses.
According to the OECD leadership, the Spanish economy faces energy price spikes, production delays, and ongoing uncertainty that translate into real trade and financial risks, although these risks remain less pronounced than in many peer economies. The remarks are attributed to the OECD chair and leadership team, who emphasize that the weathering of these shocks will depend on policy responses and external developments.
The development of the labor market stands out positively
Looking at the broader macroeconomic landscape, the labor market has once again shown resilience. Since the onset of the pandemic, unemployment outcomes have been steadier than many international forecasts suggested. The December projection for 2022 placed unemployment around 13.6 percent for 2023, but the latest estimates show a continued improvement through 2022 at roughly 13.6 percent, with a modest uptick to 13.9 percent projected for 2023 in the OECD’s revised scenario. This trend underscores a gradual shift toward tighter labor markets, which can support household incomes and domestic demand.
With regard to the budget balance, the deficit is projected at 5 percent for 2022, a reduction of four tenths from the December estimate. The trajectory through 2023 points toward a deficit around 4.2 percent, aligning with earlier projections and reflecting ongoing fiscal measures aimed at stabilizing public finances while sustaining growth. The revised outlook also notes a lower exposure to Russia compared with other major euro-area economies, which helps dampen downside risks for Spain relative to peers. In this context, Germany’s growth forecast is trimmed to 1.9 percent for 2022 (down 2.2 percentage points), France is expected to grow around 2.4 percent (down 1.8 points), and Italy about 2.5 percent (down 2.1 points).