The Spanish economy throws signs of weakening for the second half of the year, especially due to the decline in consumption by families and households. As a consequence, growth for this year could be between 1.9% and 2.1%according to the Esade economic and financial report for the second half of this year, prepared by EsadecPol.
He Bank of Spain, Like other research bodies and services, it raised the estimates for 2023 a few days ago by seven tenths, with a re-expected estimate of last March, up to 2.3%, even above the 2.1% forecast by the Government.
Esade’s calculations are based on its tool created to measure the evolution of the economy in real time, that provides growth of 0.6% in the second semesteras in the first, explained Manuel Hidalgo, the person in charge of it.
Being a fluctuating evolution, with a month of May rising and a June with a lower rate of activity than expected, the range, as of today, stands between 1.9% and 2.1%, although, up to the slowdown last month had even reached 2.2% or 2.3%, according to Hidalgo.
The investment and exports have become the engines of Spanish growth today, after living the economy a real roller coaster for the pandemicthe war in Ukraine and the consequent escalation of inflationaccording to Toni Roldandirector of EsadEcPol.
The international context, with un USA, which could enter a recession in the second part of the year and a weak growth in the euro area as a wholebelow 1%, according to Josep ComajuncosaEsade professor.
Vulnerabilities
Despite the good rate of growth of the Spanish economy, vulnerabilities persist, such as the high indebtednessthe low productivitywith “more or less the same GDP per capita as in 2005“, explained Roldán and reforms “with a long way to go”.
Besides the inflation and the consequent loss of purchasing power of wagesat a global level influences the loss of growth rate also the interest rate hikes. Comajuncosa highlights that after a good start to the year the economy began to slow down in the second quarter, affected, among other factors, by a lower increase in credit demand. And, as a consequence of price increases, lower consumption.
lower consumption
On a Spanish scale, the contraction of consumption of families and households affected by inflation, wages and the rise in interest rates, which reduces the rate of credit requests. But there are areas with better evolution, such as the acquisition of vehicles or durable consumer goodsdriven by a labor market that pulls.
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Hidalgo states that in the second semester in Spain there is a risk of slowdown in the service sector. The real-time economy monitoring method indicates this for activity as a whole, except for the industrial production index, which was positive in May.
In recent weeks, it has been detected a certain cooling of the economy due to the indicators associated with trade and consumption. Credit, especially for housing, is shrinking, but so is consumer credit. The request for new credit is lower than the amortization, which usually anticipates a slowdown in growth, according to Hidalgo.