According to a recent report from the BBVA research department, the Spanish economy is on track to experience solid growth in the coming years. This information was published on this Monday, June 19, 2023 podcast by Rafael Doménech, head of economic analysis at BBVA Research.
Based on positive economic indicators, BBVA Research has revised upward its gross domestic product (GDP) growth forecasts for Spain, reflecting encouraging news for the country.
Real-time data managed by BBVA Research indicates that growth is expected to be around 2.8% in the second quarter of 2023.The significant figure reflects the good performance of exports, including tourism and other non-tourism services.
Tourism, in particular, is expected to grow at twice the rate of the overall economy. This is a promising sign for the sector. In addition, robust growth in external demand has offset a lack of buoyancy in domestic demand, particularly in private consumption and investment.
BBVA Research estimates that the Spanish economy could create around half a million net jobs by 2023, doubling previous projections. This positive trend in the labor market is an important factor in boosting economic growth and improving the socio-economic conditions of the country.
Based on these positive factors, BBVA Research has raised GDP growth forecasts for Spain to 2.4% in 2023. compared to the previously estimated 1.6%. This upward revision reflects the National Institute for Statistics’ growth update for the second half of 2022, which has positively impacted overall projections for the year.
Also, rising prices of raw materials, especially energy, have contributed significantly to economic growth. While oil prices are expected to remain contained, gas prices have seen a significant decline. This price reduction, combined with strong external demand, has created a favorable environment for the Spanish economy.
Additionally, As private consumption has slowed in recent quarters, there has been an increase in household savings. This increase in savings gives rise to higher household spending in the future, which is expected to stimulate domestic demand, particularly private consumption, throughout 2023 and 2024.
The recent wage agreement between trade unions and employers’ organizations also plays an important role in this inflationary situation. The agreement establishes a path for wage increases in the coming years, reducing uncertainty for companies and preventing an inflationary spiral.
Despite this upbeat outlook, economic growth is expected to slow in 2024, with GDP expected to slow to 1.9%. This slowdown is caused by many factors and needs to be addressed with appropriate policies and measures to maintain steady and sustainable growth in the long run.
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