The short- and medium-term outlook for the international economy shows economic weakness evident in the latter part of 2023,”This will continue throughout the year and a potential revival cannot be ruled out.“, regarding the recent geopolitical situation, the Federation of Merchants of Las Palmas reports in its current statement.
To the already existing tensions from the war between Russia and Ukraine or the conflict in the Middle East, the recent military intervention of the United States and the United Kingdom in Yemen has been added, creating new uncertainty in the most strategic region. Global trade is like the Red Sea.
The first effects on commercial shipping are already beginning to emerge, and a growing number of shipping companies have announced rerouting of their routes, which could extend delivery times in supply chains and assume new upward pressure on shipping costs.
All this, inflation, although at lower levels than recorded in 2022, remains above reference values, especially in advanced economies.
In economies like the US and the EU, prices ended the year with a 3.4% increase and in the euro area, CPI stood at 2.9%.
In this context, commodity prices maintained a downward trend as energy components such as oil closed the year below an average of 77.5 dollars/barrel, moving away from the 90 dollars it reached in September.
However, the evolution of crude oil prices is subject to relative instability, as the weakness of the global economy and the supply of production in non-OPEC countries may help control prices, while geopolitical conflicts in the Middle East persist. And the strategy of major producing countries in the coming months could create new sources of tension in markets.
On the other hand, the way the global economy is described, even showing a trend towards a general decline, presents some sector differences and differences between economic areas, and countries like the US or China show more resistance in the EU. The evolution is certainly more pessimistic, especially in powers like Germany.
This is suggested by indicators such as the euro zone industrial production index, which fell 0.3% again in December, or the stagnation of the goods and services PMI in the region.
These results give a good account of the weakness experienced by European industry and the slowdown in services, which, in turn, includes the transfer of effects obtained from worsening financial conditions in the economy. Impact on consumption and internal demand.
Within the eurozone, the slowdown is particularly acute in major economies such as Germany, where gross domestic product contracted by 0.3% in 2023, as opposed to a 1.8% increase by the end of 2022, according to the first estimate released by the German Federal Reserve. Bureau of Statistics.
Forecasts for 2024 continue to be revised downwards, and the OECD has cut its forecast for this year to 0.9%, largely due to a fresh worsening of forecasts for this year in Germany, where they fell by three-tenths to 0.6 percent.
In this framework, after being suspended for the last four years, the objective of various governments' action to boost the economy will now be conditioned by the re-establishment of fiscal rules agreed by the European Council at the end of 2023. The agreement reintroduces limits of 3.0% of deficits and 60.0% of public debt for member states, although it allows flexibility to consider adjustment paths tailored to each country's situation. Up to a maximum of seven.
Regarding recent economic evolution in other major economies, such as the United States, recent indicators show signs of greater certainty than the European case, with job creation data recorded in December due to continued strength in the labor market. More than expected (216,000 new jobs).
Projections indicate that GDP growth will be 2.4% in fiscal 2023, though its growth will be 1.5 percent in 2024.
For China, the growth figure for 2023 was finally 5.2%, slightly higher than expected in line with the improvement shown in recent months by some indicators such as retail sales and industrial production. A crisis in the real estate sector, weakness in domestic consumption and a fall in external demand continue to weigh on short- and medium-term growth potential. .
Moving the analysis to Spain, the latest indicators reflect a relative slowdown in our economy in line with the slowdown shown after the summer, the impact of external outbreaks and the low pulse of the domestic market, especially investment, and forecasts that the GDP will be 2.4% in 2023 and less than 1.5% in 2024. They say that.
In this context of low growth, the labor market continues to show positive data, and the attachment statistics of the last day of December indicate that employment in our country will increase by 2.8% in 2023, bringing the total number of affiliates to 20,733. 042 workers.
As far as the Canary Islands are concerned, recent data suggest that last year ended better than expected, above all thanks to the tractor effect on manufacturing and employment, thanks to the recovery of tourism and service activities.
Not in vain, the latest figures published by AENA confirm a strong recovery of tourist activity in the Canary Islands in 2023.
Throughout the year, the islands recorded a total of 14,170,762 foreign visitors, which is 1,532,166 more than the number of tourists the Canary Islands received in 2022 (+12.1%).
In this scenario, although the data for the whole year is not yet confirmed, as of November, the entire accommodation sector of the islands already showed an increase in demand of more than 7.0% in all hotels and apartments. Statistics provided by Social Security show growth in employment in branches directly related to tourism activities.
The good performance of tourism has boosted employment, and by 2023 the number of subsidiaries in branches such as hospitality or commerce in the islands has increased by 6.3% and 2.8% respectively over the past year, and together, they will add 14,237 new workers.
Precisely, the increase in employment in these branches together with the health sector, where 5,150 new members have been created, illustrates the dynamism of job creation in the Canary Islands over the past year.
The overall number of social security-enrolled workers in the archipelago increased by 4.2% in December 2023, representing 36,351 additional workers compared to the same month in 2022.
For its part, registered unemployment in the Canary Islands and nationally has decreased over the past year, by 8.36% in the archipelago, 15,315 fewer unemployed, and 4.59% overall with 130,197 fewer unemployed.
Despite the increase in employment, the reality is that the economy of the Canary Islands maintains very weak growth.
The islands' GDP growth data for the third quarter of 2023 shows that our economy recorded zero growth during that period, and projections indicate that our economy will grow at a moderate pace of around 2.0 in 2024. %, almost half of the growth estimated to end in 2023 (+3.9%).
In terms of prices, the latest CPI data for December showed a 0.1% month-on-month rise in inflation in the islands, above the national average which ended the month with zero change.
In the Canary Islands, goods and services related to “housing” (+0.9%) cost one-fourth more than they did in the national area as a whole (+0.5%), in a situation where electricity bills rose to 2.5. % in the archipelago and 1.3% statewide in December.
Similarly, the prices of groups related to service activities rose most strongly in the islands, mainly in the “Restaurants and Hotels” group (+0.5% Canary Islands; +0.2% National).
On an annual basis, the CPI ended with an increase of 3.8% in the Canary Islands in 2023.
Throughout the year, the higher impact of food and service prices on the islands explains the year-on-year growth of the CPI in the archipelago, starting with the groups “Food and non-alcoholic beverages” (+9.8 % in the Canary Islands). islands; +7.3% National) and “Restaurants and Hotels” (+6.8% Canary Islands; +5.5% National) showed higher price increases in our territory than in the whole state.
For their part, the prices of goods and services related to “housing” fell again, recording a decline of 3.5%, although this decline was more moderate than the national average (-5.9%), resulting from a greater contraction in the electricity rate at the state level (-17.7% national; -17.4% Canary islands).
In this context, core inflation continued to increase, and in the Canary Islands on a monthly basis (Canary Islands +0.4%; National +0.2%) and year-on-year (Canary Islands +3.9% ; National +3.8%).
In short, international economic activity continues to go through a pronounced recessionary process. In the specific case of the Canary Islands, despite the important support of tourism in production activities and employment, it will not be excluded from this uncertain panorama, especially in the context of a significant cooling of the European economy to come. We must also add the political instability prevailing in our country after the inauguration of the new legislature.
In this situation, we must implement measures to guarantee the competitiveness of our productive capacity, and to do so it is necessary to reduce the tax burden, and the tax burden on households and companies will be maximum. And the adaptation of labor costs to this uncertain framework, excluding measures such as the increase of SMI agreed outside of the social dialogue, the losses or disappearance of many companies in some sectors and territories, will have a great impact on SMEs and the self-employed, and it will risk an increasing slowdown in the economy and employment and Adds a new factor of uncertainty.