credit rating agency Fitch Ratings has reduced its expectations for Spanish GDP growth by two tenths to 1.2% for this 2023. On the other hand, for 2024 there is also a downward revision, with a growth of 1.8%. Forecasts are two and eight tenths lower than the previous ones.
Despite these cuts, Spain will be the eurozone economy with the highest GDP growth thanks to the manna provided by European funds to aggregate demand. Of course, Fitch points to Spain among the countries vulnerable to the rise in interest rates due to the large number of mortgages subject to variable rates.
About the world economy, Fitch indicates that it will grow this year by 2%six tenths more than estimated in December, thanks to the reopening of China after the ‘Zero Covid’ policy, the fall in gas prices in Europe and the resistance of household consumption in the United States.
The agency notes that this is their first upward revision since the start of the ukrainian war. However, it has reduced its growth forecasts for 2024 to 2.4% due to the delayed impact of the interest rate hikes by the European Central Bank and the United States Federal Reserve (Fed).
For his part, the eurozone will see a rise in GDP of 0.8% in 2023 and 1.4% in 2024. Fitch has revised the figure for 2023 and has increased it by six tenths due to the improvement of the Composite Purchasing Managers’ Index (PMI) compared to the depression recorded at the end of 2022. In addition, general inflation it has moderated, but the core has rebounded to 5.6% in February. Looking ahead to this year, however, he predicts that energy inflation will be negative from the second quarter of 2023.
By contrast, inflationary pressures will rise due to the negotiation of new collective agreements that will revalue the wage bill. Fitch notes that job creation has been contained, but a rise in unemployment has not materialized yet. In turn, the agency points out that the impact of the ECB rate hikes is strangling credit demand and supply, but it has an uneven impact, as it shows that mortgages in France tend to be fixed-rate, while in Other countries are usually at a variable rate.
Other countries
As for other countries, United States GDP will advance 1% this year and 0.8% next year due to the strength of the labor market and consumption. American families will continue to consume due to rising wages and the remaining savings accumulated during the pandemic. However, Fitch warns that monetary policy tightening is slowing aggregate demand more slowly than anticipated and could enter a recession in the third quarter of 2023.
After, China will grow 5.2% in 2023, which is an upward estimate of 1.1%, and that is justified by the strength of spending on “contact-intensive” activities, such as tourism, leisure or hospitality, which were particularly affected by anti-covid restrictions in the past. It has also been possible to appreciate that interurban mobility is above pre-pandemic levels. Even so, the economic recovery will not be as intense as seen in 2021 due to the weakness of the export component of GDP.
