Economists have raised their GDP growth forecast by two tenths to 2.3% this year

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Economists have raised their GDP growth forecast by two tenths to 2.3% this year

He lowered his forecast for the unemployment rate to 11.8% and kept the deficit forecast at 4.4%.

According to its latest ‘Financial Observatory’, the General Council of Economists this Monday forecast growth for the Spanish economy this year to 2.3%, two-tenths higher than its previous projections.

Growth in the second quarter moderated –0.4%– and despite an improvement to one-tenth of the previous quarter’s growth, good expectations for the tourism sector, lower inflation and higher levels of occupancy are projected. Positive growth in the third quarter.

Specifically, economists expect gross domestic product (GDP) to grow by around 0.5% in the third quarter, largely attributed to the services sector due to a boost in tourism, whose summer campaign is slated to last until October. hopefully.

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However, the organization, headed by Valentin Pich, warned that the development of the economy this second semester could be affected by the situation in the euro zone countries, which are the main destination for Spanish exports, which account for more than 65%.

“The European position in the global context is weak and showing signs of slowing down due to the proximity of the war in Ukraine,” the CGE warned.

In addition, economists have drawn attention to the gradual decline of the industrial sector, which today accounts for only 16% of GDP.

He maintains his forecast for CPI at 3%

With regard to the development of prices, economists have highlighted that it is more favorable in Spain than in the euro area. Thus, economists maintain their forecast for a year-end consumer price index (CPI) increase of around 3%.

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With regard to core inflation, the CGE reported that, although it did not increase compared to the previous month, it increased at a year-on-year rate of 6.2%, which is three-tenths higher than the year-on-year rate for the month of June , with which the trend of decline in the inter-annual rate since March has been broken.

Cut its forecast for the unemployment rate to 11.8%

On the other hand, economists have revised their estimate of unemployment rate to 11.8%. As they explain, given the strength of the services sector in these months marked by the tourist season, the good employment registered so far needs to be taken with due prudence in terms of its maintenance in the last quarter of the year.

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With respect to debt, CGE estimates that the debt to GDP ratio will gradually decline and expects it to be around 110.5% by the end of the year, mainly due to increased collections and increased contributions to good due to employment practices, as well as monitoring the policies emanating from Brussels in this regard.

Finally, a slowdown in the economy, an increase in fiscal charges resulting from measures to fight inflation and a rise in interest rates, among other factors, means that economists have maintained their budget deficit forecast for 2023 at 4.4%.

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