BBVA raises its forecasts for 2023 by four tenths to 1.6%
BBVA Research has raised its forecasts for economic growth in Spain for this year to 1.6%, four tenths more than in the estimate made in December. A movement that has justified the improvement in the global environment and the resistance of domestic demand.
However, according to its report ‘Situación España’, the prospect of further rises in interest rates due to the persistent wave of inflation (inflation rose one tenth of a point to 6% in February and core inflation rose to 7.6%) and the greater economic uncertainty has led BBVA Research to significantly lower their estimates for the year 2024. Specifically, it has lowered its growth forecast from the 3.4% estimated in December to 2.6%.
Regarding inflation, in his report, expects prices to fall to around 4% on average this year and that the underlying price remains between 5 and 6%. In 2024, both figures would be at 3%. “The loss of purchasing power is widespread. Reducing inflation to 2% will be difficult and will take time,” the experts at BBVA Research have anticipated.
Criticism of economic policy
From BBVA Research experts have also warned against some of the recent economic measures because may slow down the growth of private investment, while the upward risks of inflation and the cost of financing remain. In addition, they have warned that monetary policy acts with delay and the sensitivity of households and companies may increase as accumulated savings are depleted.
In this sense, BBVA Research experts have agreed on the need to reduce the imbalance of public accounts and price pressures. In the opinion of these experts, what he has called the “reform effort” must go ahead to provide medium-term security for public finances and increase the competitiveness of the Spanish economy.