BBVA Research thinks the economy will slow faster than expected next year, but GDP of all autonomous communities will continue to rise
Next year the economy will slow down more than expected. Here’s how BBVA Research estimates in a report published this Wednesday, in which it lowers growth forecasts across the board in all autonomous communities, placing the average at 1.8%, almost a point below what the government estimates, which recently lowered its estimates but still forecasts GDP to grow by 2.7% in 2023.
This is mainly due to lower European demand for goods and tourism, which will affect the areas most exposed to the European market to a greater extent. Rising interest rates, uncertainty about economic policy and rising inflation could also affect growth for next year.
However, BBVA Research is reviewing the growth of some communities in the north upwards, justifying it in the greater dynamism of investment and exports. On the other hand, the growth of the Mediterranean and the southern peninsulas is revised downwards as they are more affected by slower consumption growth.
Next year, however, all autonomous communities will continue their recovery. And even five regions will make progress of more than 2%: the Balearic Islands (3.5%), the Canary Islands (3.0%), Madrid (2.6%), Extremadura (2.4%) and Andalusia ( 2.0%). ). Valencia, Catalonia and Castilla-La Mancha, for their part, could grow in line with the national average, estimated at 1.8%, while the expected growth would be lower than the average in Murcia and La Rioja (1.6%) ; Aragon (1.2%); Cantabria, Castilla y León and the Basque Country (1.1%); Asturias, Galicia and Navarre (0.8%).
If these predictions are met, Extremadura, Castilla-La Mancha, Murcia, Andalusia, Valencia and Madrid could recover 2019 GDP levels before the Covid-19 crisis by the end of 2023.
The BBVA study service points out that the factors that explain the downward adjustment are diverse. On the one hand, the lower growth prospects for the European Union as a result of the war in Ukraine imply a slowdown in European demand for goods and tourism. This will limit the growth of Aragon, Navarre, Galicia and the Basque Country among the industrial communities. Catalonia, Valencia, the Canary Islands and the Balearic Islands will also be affected by the slower progress of tourism services exports. For this reason, the downward revision of the growth forecasts in these communities is larger.
In addition, energy prices that will remain very high and their potential scarcity could hinder the recovery of industrial communities, which are most dependent on energy consumption in their production and where natural gas is a relevant energy source. In Murcia in particular, natural gas consumption per unit of GDP is three times that of the national whole, while Navarra, Aragon and Asturias practically double it. Similarly, the rise in interest rates and the economic slowdown will increase the financial burden on households and businesses, although the impact at the regional level would be heterogeneous.
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.
