The economy will progress almost a point less than expected as inflation will remain at 5% at the end of the year, but it will remain the fastest growing in the eurozone as Germany slips into recession
The International Monetary Fund (IMF) joins the list of organizations questioning the economic projections on which the government has based its general budgets (PGE) for 2023. The organization, in its latest World Economic Outlook report (WEO, for its acronym in English), predicts that the Spanish economy will grow just 1.2% next year, eight tenths below its July estimates and two points less than in July. April, when the war in Ukraine had already been active for a month.
It is one of the most negative predictions for Spain that several organizations have given in the past week. While the government foresees an advance of 2.1%, the Bank of Spain believes this will be 1.4% and the Fiscal Authority (AIRef), 1.5%. Only BBVA Research predicts less growth than the IMF: 1%. From the Executive, they explain that the first quarter of 2023 will be more positive than other organizations have forecast, as they are confident that European funds will have an effect on the economy from the start of the year, something that the Bank of Spain has postponed until the end of the year. spring.
In a brief comment on Spain, the IMF states that the good recovery from the tourism and industrial production pandemic in the first half of this year has helped to push forecast growth by three-tenths to 4.3% for 2022. in line with the rest of the organisms and the government. Instead, he warns that “Spain’s growth will slow dramatically in 2023” against inflation.
The CPI percentage will remain very high next year. The Washington-based organization calculates that inflation will end at 8.8% by 2022, an expectation that all organizations already share as inevitable after ten months at such a high level. But for 2023, they also expect inflation to remain at record levels, closing the year at 4.9%.
Despite these bad omens, the Spanish economy will remain one of the fastest growing in the entire eurozone. In fact, the average of the euro countries will experience a stronger slowdown than that of the United States, the IMF warns. While it will increase by 3.1% this year, it will only increase by 0.5% next year, swept up by the bad behavior of countries that have been so powerful until now, such as Germany (-0.3%) or Italy (-0.2%). .
Both powers will fall into recession when they see their GDPs drop below zero, a situation not seen since World War II, and between the pandemic and the invasion of Ukraine, they will live twice in just four years. In the case of Germany, the IMF believes that the consequences of the cessation of Russia’s gas supply will inevitably affect the country, for which they had calculated a growth of 0.8% in July and is now in recession (-0.3 %), will lead.
From the Ministry of Economy, they explain that despite the negative international context, the IMF has confirmed the “strong recovery of the Spanish economy”. For example, by 2023, national GDP will double the growth rate of the eurozone average and be “far above” that of the other major euro economies. In addition, as far as inflation is concerned, “it is expected to peak in 2022” and will be below the eurozone average 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.
