Funcas cuts economy growth by half a point for this year

The Funkas panel of analysts has cut its GDP growth forecast for this year by half a point to 4.3%, due to worse-than-expected growth of the Spanish economy during the first quarter.

Overall, 15 of the 19 panelists have skewed their projections after falling short of projected GDP growth in the first quarter, weakness shown by some of the indicators available so far for the second quarter and expect an even lower growth. . remaining quarters of the year.

National demand will contribute 3.3 percentage points to GDP growth, eight tenths below the March consensus, with a strong downward revision of public and private consumption and investment, particularly in the construction arm.

On the other hand, the foreign sector would add a single digit to GDP, which represents an improvement of three tenths due to a reduction in the expected growth of imports.

Experts have highlighted that the prospects of recovery in Spain and other major countries are bleak due to the intensity of uncertainties around the world. ,Geopolitical and supply shocks add to inflationary pressuresThis resulted in tightening of monetary policy with consequent impact on demand”, he pointed out.

For its part, the consensus forecast for GDP growth in 2023 is 3%, meaning a 1.3 point slowdown compared to this year as a result of a weakening of the contribution of national demand and, above all, due to Zero contribution of foreign sector.

Average inflation of 6.9%

Inflationary tensions have prompted analysts to raise the average inflation forecast for this year by 1.5 percentage points to 6.9%. However, he expects it to decline in the coming months. ended December with an inter-annual rate of 4.3%.

For 2023, panelists expect a moderation to an average annual rate of 2.2%, up from a 1.8% annualized rate in December. inflation core will be 3.6% and 2.4% in 2022 and 2023 respectively.

For the labor market, the pace of job growth will slow. Thus, the average estimate for 2022 has been reduced by six tenths to 2.9%, while the forecast for 2023 is 1.9%.

low unemployment rate

For its part, the average annual unemployment rate will continue to decline, up to 13.7% in 2022 -two tenths less than the previous panel- and 13.2% in 2023.

As far as public finance is concerned, the panel of analysts predicts a reduction in the public deficit in these two years. It will be 5.5% in 2022 and 4.8% in 2023, meaning a deviation of five and nine tenths, respectively, from the government’s forecast.