The economic scenario it has deteriorated a lot. The geopolitical tensions for the war in Ukraine, the energy crisis and the monetary policy turn advance strongly against the economic expansion that was anticipated months ago after the goodbye to the coronavirus pandemic. And this translates into a “sharp slowdown” in the economy after the summer, according to macroeconomic forecasts published by the Savings Banks Foundation (Funcas). This study service maintains its forecast of increase at 4.2% this year and anticipates a strong contraction to 2% next year, 1.3 points less than in the previous forecast, with average inflation of 8.8% in 2022 and 5% for 2023.
Although this study service does not confirm the much talked about recession, at least not technically –forecasts a flat growth in the fourth quarter of 0% and a rise in the first quarter of 2023–, nor does it rule it out in case the situation worsens, something that cannot be ruled out in the current context of crisis. “It would be enough for (energy prices) to grow more (than expected) to have negative growth (in the fourth quarter)”, acknowledged the director of the International Situation and Economy of Funcas, Raymond Torresin the presentation of the forecasts.
Thus, GDP growth this year does not vary compared to previous forecasts, but the composition of this rate in which the domestic demand reduces its weight up to 2.1 points (1.7 points less than the March estimate) due to the loss of purchasing power of consumers due to inflation, while the external one increases up 2.1 points (1.7 points more) due to the recovery of tourism, but also due to the rise in exports of non-tourist goods and services.
The Fundación de Cajas de Ahorros projects average inflation for the current year of 8.8%, 2.8 points higher than its previous scenario, and 5% for 2023, 2 points higher. Torres has highlighted that the gap between the growth of domestic prices and of the external prices is unprecedented in the historical series since the 1970s. “The impact is a impoverishment of the country. It’s like it’s a tax that we have to pay for what we consume and import. We all become poorer in relative terms and the question is how to share that cost among the main agents”, adds Torres.
On the other hand, the unemployment forecast has been reduced, both for 2022 and 2023 with rates of 12.7% and 11.8%, respectively, due to the cut in the forecast for domestic demand. The internal debt will end this year at 113.9% of GDP (1.1 points less than the previous forecast) and 112.1% in 2023 (0.3 points less) and the trade deficit will be in 2022 of -4.7% of GDP and for the following year of -4.5%.
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In this context, Funcas has called for a income policy that you do not deteriorate the economic competitiveness and that it includes pensions given its strong impact on public spending. “Increasing public spending by 1% is a very significant burden on budgets in a context in which the spending generated by the accumulated public debt is going to increase,” said the general director of Funcas, Carlos Ocaña. As well as a macroeconomic policy that “contains inflation without damaging the prospects & rdquor; understood as a “fiscal action focused on the most vulnerable sectors with incentives to save in households and companies & rdquor ;.
Regarding the taxes on energy and banking announced last week by the Prime Minister, Pedro Sánchez, Ocaña has warned that “taxes with Robin Hood motivation have the drawback that they raise less than the costs they impose on economic agents & rdquor ;, in the absence of knowing the specific details of both rates. “You have to be very careful when introducing measures like these & rdquor ;, he added.