the Council of Economists lowers it to 0.9% in 2023


The General Council of Economists (CGE) has revised down its growth forecast for the Spanish economy for this year by one tenthup to 3.8% (thus placing it six tenths below the calculation prepared by the Government), and six tenths that of 2023, at 0.9% (1.2 points below that collected in the last macroeconomic picture) due to the effect of inflation and the rise in interest rates on disposable income and household savings.

In their financial observatory published this Monday, economists point out that they expect a stagnation in the last quarter of the year, which will be followed by a contraction of 0.3% in the first quarter of 2023 due to the fall in domestic demand and exports. The Independent Authority for Fiscal Responsibility (AIReF) recently warned that the Spanish economy could enter a technical recession between the last quarter of this year and the first quarter of the coming year, although the supervisory body limited the impact of this loss of activity .

The observatory revises its average inflation forecast for this year slightly downwards -placing it in a range of between 8% and 8.2%, when in its previous estimate it was 8.5%-, but maintains that of 2023 at 4%, based on the assumption that energy and commodity prices will “come down” in the first half of next year.

The high rate of inflation as well as the increase in interest rates is affecting disposable income and the savings rate which, in the second quarter, the latest data published by the INE, has had a negative variation of 1.8 points, reaching 8.5% of quarterly gross disposable income, which causes domestic demand to contract. “We must bear in mind that, unlike in the United States, domestic demand in Europe, and specifically in Spain, is weaker and more sensitive to these effects. Added to this is the fact that in the next two quarters tourism, with a great weight in our economy, it will be residual”, they point out.

Economists also highlight that all analysts forecast economic growth lower than that stated in the 2023 budgets, although they admit that policies aimed at trade, tourism, SMEs or infrastructure “could be a shock to the economy.”


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