The agency calculates that the economy will progress seven-tenths less than the government had forecast and that the recovery from pre-pandemic levels will not come until 2024
Just 24 hours after the government approved its 2023 general budgets in the Council of Ministers, the Bank of Spain released its economic forecasts for this year and the next, warning of a possible imbalance in said accounts. And it is that the body chaired by Pablo Hernández de Cos calculates that in 2023 the Spanish economy will grow seven-tenths less than the government budgeted, which would mean about 8,000 million euros less.
And they are not the only ones who are calculating lower growth than the government for next year. The Internal Revenue Service (Airef) endorses the Executive’s macroeconomic forecasts, but warns that the growth estimate for 2023 carries “downside risks” with an estimate of 1.5%.
According to this calculation, the recovery of pre-pandemic GDP levels will be postponed to the first quarter of 2024, the year in which the economy will grow by 2.9% according to the regulator. It will be in the spring of 2023, when high inflationary pressures begin to ease, when Spanish economic activity will return to a “growing force,” the agency’s report said, pointing to growth of just 0.1% in this year. third quarter (July to September) despite the attractiveness of tourism in the summer, compared to the 1.5% increase in the second.
And inflation forecasts are not optimistic either. According to the Bank of Spain, prices will end the year at 8.7%, suggesting that the CPI curve could have peaked this summer, having already softened slightly to 9% in September from 10.4% in September. August. They are 1.5 points more than predicted in their forecasts three months ago. For next year, the regulator is calculating inflation that will remain anchored at a very high level, at 5.6%, which is 3.1 points more than forecast in June. It will be as early as 2024 when inflation will begin to give the economy a pause and moderate to 1.9%, according to calculations by the Bank of Spain.
This high inflation will lead to a slowdown in private consumption that is stronger than the one predicted by the government when preparing its public accounts. While the Executive believes Spaniards’ consumption will grow by 1.6% this year and 1.3% next year, the Bank of Spain predicts it will be 1.2% and 1.3% respectively.
The growth forecast by the government is also based on the good evolution of exports of goods and services, mainly thanks to the attractiveness of tourism already comparable to that of 2019, before the pandemic, a year that was also a record year for the industry. Budgets foresee an export increase of 17.9% in 2022 and 7.3% in 2023. But the Bank of Spain is not so optimistic about sales of goods and services next year, leaving the advance at 4%.
With regard to employment, the Bank of Spain calculates a favorable evolution in the unemployment rate, which will close this year at 12.8%, two points less than last year. In 2023 it will remain at the same level and will fall to 12.4% in 2024. The government is again more optimistic than the agency and predicts that unemployment will already fall to 12.2% next year.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
