The Chamber of Spain cuts its economic forecasts for 2022 and 2023, but rules out recession

The Spanish Chamber of Commerce has lowered its economic growth forecasts for both 2022 and 2023, although at this time it rules out that a situation of ‘technical recession’ will occur, that is, two consecutive quarters with falls in the Gross Domestic Product (GDP). ).

According to the latest forecasts published by the body chaired by José Luis Bonet, the Spanish economy will grow by 4.1% in 2022, two tenths below what was estimated in July, while in 2023 the GDP will increase by 2.2% , six tenths less than previously calculated.

As anticipated by the Research Service of the Chamber of Spain, the moment of greatest slack could be recorded in the second quarter of 2023 when the evolution of GDP could have a negative sign to recover in the following quarters.

In relation to the evolution of inflation, the Chamber of Spain has revised its estimate upwards for both 2022 and 2023. Specifically, for the current year the Chamber of Commerce calculates that the Consumer Price Index (CPI) will be at 8.4% annual average, eight tenths above the previous forecast. For its part, in 2023 average inflation will be 3.9%, according to the agency’s calculations, six tenths of a percentage point more than the estimate made in July.

As for core inflation (without unprocessed food or energy products), the Chamber of Commerce Research Service estimates that the annual average will be 4.8% in 2022 and 4% in 2023, exceeding by one tenth of the general CPI.

SLOWDOWN OF BUSINESS INVESTMENT IN 2023

From the perspective of domestic demand, the lower dynamism in 2023 will be due, above all, to the slowdown in business investment. Gross fixed capital formation will grow by 3.3% next year, practically half of what was expected for this year, above all due to the lower strength of investment in capital goods and the lower pulse in construction.

As for the foreign sector, lower year-on-year growth is estimated for both exports (from 11.7% in 2022 to 4.4% in 2023) and imports (8.4% this year and 4.2% the next).

LOWER RATE OF JOB CREATION

As regards the labor market, the rate of job creation will be lower than estimated in July (2.8% in 2022 and 1.4% in 2023), but this will not prevent the unemployment rate from continuing falling from 13.6% in 2022 to an average of 13.2% next year.

According to the new forecasts of the Chamber of Spain, the public deficit reduction path will accelerate to 5.3% in 2022 and 4.8% in 2023.

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