Economists are upgrading their forecasts for the growth of the Spanish economy in 2024. A consensus gathered on the Funcas Panel forecasts GDP growth of 2.1% this year, more than two-tenths of what was expected two months ago. In the first quarter due to investment and exports. The consensus is clear: of the total panel members, thirteen revised their predictions upward, none downward. The forecasts of the main analysis already improve the reading of the government, the Independent Commission for Fiscal Responsibility (AIREF), the International Monetary Fund (IMF) or the Organization for Economic Co-operation and Development (OECD).
Consensus maintains expected growth in national demand Greater emphasis on investment And public consumption by public administrations is low. The Contribution of foreign sectorFor its part, Revised by two tenths to 0.2%This is because, compared to the previous consensus forecast, lower growth in imports and slightly higher growth in exports is expected. If the growth in the first quarter is 0.7%, the remaining quarters are expected to grow at 0.4%.
By 2025, the GDP growth estimate remains unchanged at 2%. The higher growth in investment in both construction and machinery and capital goods will compensate for the lower activity of consumption – especially public consumption – and therefore, the contribution of national demand will remain the same this year (1.9 ), while the foreign sector will add one tenth.
Year of change in inflation and employment
A paradoxical reference is provided by prices, which have been revised upwards: think tanks expect general and core inflation to increase by 3.1% this year. Prices rose more than 3% at the start of the year due to the withdrawal of anti-inflationary measures and services inflation.
Projections for 2025 are 2.3% and 2.4% for general and basic respectively. The annualized rate for December 2025 will be just over 2%.
As for the labor market, This year’s employment growth forecast has been revised up two-tenths from the previous group., up to 2.2%, but by two-tenths down to 1.6% in 2025. This would allow the unemployment rate to fall to 11.2% in 2025, unchanged from the previous consensus. Allocation is still far from the objectives of achieving ‘full employment’ over this period.
The panel projects the public deficit to narrow to 3.4% in 2024 and 3.1% in 2025. These forecasts are better than previously expected, although they differ from what the European government presented to the Commission. Meeting the objectives of the new financial rules by 2025.
The panelists understand that in a slightly better external environment, and facing persistent inflation in countries like the US, Interest rates will fall more slowly than expected. The group maintains its forecast for the first cut by the ECB in June, but subsequent adjustments will be smaller, leaving the deposit facility above 2.5% by the end of 2025, 20 basis points higher than the previous forecast. Euribor will fall to 3.2% by the end of this year and 2.8% by the end of 2025.
