The funcas panel has revised its growth forecasts for the Spanish economy upwards. Specifically, it has risen to 1.5%, by two tenths compared to the previous forecast, and anticipates an acceleration of the economy of six tenths in 2024, up to 2.1%. According to a note sent to the media this Wednesday, the upward revision compared to the panel for the month of January is motivated by “a better evolution than expected in recent months”, although it is indicated that the panel was closed before the current episode of financial instability that began with the fall of the US bank Silicon Valley Bank (SVB).
The Funcas panel estimates the average inflation rate for this year at 4.2% -two tenths more than the previous forecast, due to the “interruption” in the first two months of 2023 of the moderation of the CPI-, which would be reduced to 2.8% in 2024. Meanwhile, the underlying rate would rise in 2023 to 5.5% to fall next year to 3.3%. For the external experts of Funcas, the context continues to be “uncertain” due to the high inflation and the aforementioned crisis after the bankruptcy of the SVB.
In this sense, the Funcas consensus foresees that interest rates will rise to 4% in the second and remain that way until mid-2024, so that the Euribor reaches its maximum in the second half of this year at 4%. to be below 3.5% at the end of 2024, which would be more pronounced in the next three quarters, around 0.4% and 0.5%.
In addition, they are revising the growth forecast for public consumption upwards and for household consumption and investment in all its branches downwards, and estimate the contribution of national demand to economic progress for the current year at 1.2 points. However, by 2024 the contribution of national demand to GDP will reach two percentage points and will observe a moderation in public consumption at the same time that investment and private consumption will “recover their bellows”, while the foreign sector will contribute a decrease to growth. .
Regarding the labor market, the panelists maintain their “positive tone”, as long as the employment growth forecast is 1.1% for 2023 and 1.6% for 2024, while the unemployment rate will stand at 12.9% this year and will drop five tenths to 12.4% next year. Likewise, Funcas foresees a reduction in the public deficit in the next two years, so that it will stand at 4.2% in 2023 -one tenth less than in the forecast of the previous panel- and at 3.7% in 2024.