The General Council of Economists (CGE) predicts that the Spanish economy will have grown by 2.4% in 2023, which is more than doubling the estimate they made public a year ago (1%). Its updated forecast for 2024 is reduced to 1.6%, one tenth below its previous estimate. In this way, economists have indicated that this increase is due to the series of statistical reviews of the National Institute of Statistics (INE) in 2023, which have revealed the better performance of the economy both in 2022 and in the first half of the year. 2023.
In relation to the environment, the CGE has indicated that Spain is one of the best-placed countries in GDP data, thanks mainly to the evolution of domestic consumption, especially households, which in the third quarter of 2023 has increased by 1. 4%. However, they have warned that the countries of the euro zone show no signs of recovery, which will end up having an impact on Spanish exports, which fell by 2.4% in October in an interannual rate, according to data from the monthly Foreign Trade Report. published in December.
By 2024, if this poor evolution of exports continues, the CGE expects that it will be internal demand that will continue to support the economy, and specifically consumption, essentially private consumption. The extension of post-pandemic aid will maintain the good pattern of consumption, with 2024 where it is expected that a large part of the European funds granted will be implemented.
Public debt at 106.4% and deficit at 3.3% by 2024
Regarding the debt of public administrations, economists point out that, in the third quarter, the debt represented 109.9% of the Gross Domestic Product (GDP), so it is expected that at the end of the year it will represent 108.6% . At the end of 2024 it will be reduced to 106.4%. On December 20, a political agreement was reached among the 27 member states of the European Union for the reform of fiscal rules, which guarantees the gradual and sustained reduction of the deficit and debt, with a counter-cyclical impact.
Previously, on December 12, the Council of Ministers approved the agreement that sets the stability objectives and the non-financial spending ceiling for Public Administrations in the period 2024-2026, for the return of fiscal rules, suspended with due to the pandemic and, later, due to the impact of the war in Ukraine, an agreement that sets a deficit target for 2024 of 3%. However, the CGE estimates that the deficit will stand at 3.8% and will be reduced to 3.3% in 2024, three tenths more than the objective set by the government, mainly due to the expansion of anti-crisis measures and the increase in costs. financing of high debt as main factors.
CPI at 3.1% and unemployment rate at 11.7% in 2024
By 2024, economists predict that the inflation rate will continue to moderate and will be around 3.1% on average, as long as inflationary tensions do not increase due to geopolitical risks. Regarding the unemployment rate, it is expected that at the end of 2023 it will be at 11.8%, decreasing slightly at the end of 2024, to 11.7%, although economists have warned that the unemployment rate remains the highest level of the Organization for Economic Cooperation and Development (OECD).
“The year 2023 has been a good year for the Spanish economy, better than expected, with its lights and shadows. For 2024, the geopolitical environment is very uncertain due to the wars in Ukraine and the Middle East, and with the added risks of that new countries are getting involved,” the CGE concluded.
