The Independent Authority for Fiscal Responsibility (AIReF) calculates that the Spanish economy grew by 5.3% in 2022, nine tenths more than expected and in line with the Government’s estimate, which points to an increase of more than 5%.
AIReF has published this Monday the update of its economic forecasts, which indicate that the public deficit would close 2022 at 4.5% of GDP, two tenths more than what was stated in its latest estimates, but below the target of 5% of GDP. GDP marked by the Government.
AIReF attributes the improvement in its economic growth forecast for 2022 -the advanced data will be released on January 27- to the incorporation of the latest national accounting data, which suggests greater growth in the fourth quarter. For 2023, AIReF expects economic growth of 1.6%, one tenth more than in its previous forecast, given the containment of the prices of energy raw materials and a better-than-expected end of 2022. The Government estimates that the economy will grow by 2.1%.
Despite the containment of energy prices, the Authority has revised its inflation forecast for 2023 upwards, to 4.2%, since there are elements that “seem to point” to a greater persistence of this episode. As regards the public deficit, AIReF has raised its estimate for 2022 by two tenths, up to 4.5% of GDP, given the worst performance in the final part of the year.
The impact is concentrated in the Central Administration – which will close 2022 with a deficit of 3.1% of GDP, one tenth more than indicated in the last estimate – due to the cost of the latest measures adopted by the Government and the autonomous communities – will accumulate a deficit of 1.1% of the GDP – due to the higher spending forecast. The Social Security deficit will stand at 0.5% of GDP, while local entities will achieve a surplus of 0.2% of GDP.
The profit in 2022 is 13% (14.8% in cash terms), with significant increases in the main taxes: 16% in personal income tax, 22.4% in companies and 14.4% in VAT . Income from social security contributions will grow by 4.6%.
