The economy will beat forecasts and grow by 2.7% in 2023

Castilla y Leon's economy has recorded growth of 2.7 percent in 2023 and is already close to a GDP of 70,000 million euros, supported by the resurgence of industry, the stability of services and a historic year for exports. Those recorded in 2021 and 2022 are “net” growth for the first time in four years to ease the scourge of the pandemic on the community's economy. “This is a much larger number than we expected when we prepared the forecasts,” admitted Economy and Finance Minister Carlos Fernández Garrido during this Monday's presentation of the quarterly regional accounting. A report comes after the regional administration's GDP growth forecast for 2023 was 1.6 percent, nearly 70 percent lower than the last recorded 2.7 percent. That's still bigger than the growth estimate update they gave a fortnight ago alongside the budget legislation for 2024, in which they pegged last year's GDP rebound at 2.3%.

According to Fernández Garrido, the reasons for this critical gap are that when they published their estimates, Castilla y León was facing a high inflation rate and a continuous rise in interest rates, which “made us see a fall in investments.” Impact on industry. “We had a much more positive impact on both of these factors than we had yet considered, and these sectors performed better than we expected.”

The growth of Castilla y León's economy in 2023 is based on industry, services, exports and gross capital formation – business investments. Regional Annual Accounts. Precisely, the Minister of Economy and Finance stopped the situation of the primary sector and explained that it decreased by 8.7 percent last year, which joins the almost 13 percent already lost in 2022 due to the drought and the increase in the price of inputs. “A third consecutive decline would be difficult, but it is still an unconfirmed estimate,” Fernandez Garrido said, adding that the primary sector will see “normality” this year after two years of consecutive declines. Recovery based on agricultural production value.

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As for other sectors, industrial growth was 3.8%; Services had 3.5 percent activity; And construction increased output by three percent. In terms of demand, foreign reserves contributed 2.9 positive points to GDP, supported by the historic record of exports achieved in 2023, with 17,000 million euros sent abroad. Also positive, the evolution of total capital formation – investments – stood out, rising by 3.2 percent.

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