The bank’s study center predicts inflation will end the year at 9.3% and remain at 4.9% next year
After yesterday the Bank of Spain questioned the government’s growth forecasts for the economy included in its general budgets, this Thursday it was the turn of BBVA Research, which cut its GDP forecast for 2023 to 1% (four-tenths per below the Bank). of Spain and one point less than the government), despite the increase in forecasts for the end of this year to 4.4%.
The entity’s study center reveals in its latest report “Spain Situation” that the economy is “practically stagnating” or even registering “moderate declines” in the coming months due to increased uncertainty, the rise in already high inflation and the rise in interest rates. .
For example, analysts predict that growth will be zero in the third quarter of this year and that the economy will decline by -0.3% in the last quarter. The first of 2023 also leaves it at -0.3%, indicating a period of recession, albeit “short”. “The period of stagnation will be short and the recovery will be reactivated from the first months of the next year,” said BBVA Research Director Jorge Sicilia during the presentation.
With regard to inflation, the study center expects the percentage to remain high for several more months and is revising the calculation of the average CPI for this year upwards, from 7.9% to 9.3%. In 2023, they predict inflation will remain at 4.9%, even below the Bank of Spain forecast, which calculates 5.1% for next year.
For this reason, they see an income pact as a “priority” and to accelerate the implementation of European funds, as the medium-term situation will depend on the reforms that are promoted. Of course, households and businesses are in a lower position compared to the previous cycle of tariff increases, according to the report, while savings accumulated during the confinement period remain high and investment will be supported by European funds ‘Next Generation EU’.
Source: La Verdad
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