Tuesday, February 27

Funcas cuts the growth of the Spanish economy by four tenths, to 5.6%

The Savings Banks Foundation (Funcas) estimates that the Spanish economy will grow 5.6% this year, four tenths less than in the previous estimate, according to its economic forecasts for Spain 2021-2023 published this Thursday.

The GDP growth will be due, according to Funcas, to the rebound of the domestic demand, which will contribute 5.2 points, while the foreign sector will add 0.4 points.

Together with the pull of investment both in construction and in equipment, Funcas forecasts that the family consumption it will increase due to the release of savings accumulated in the crisis and the increase in disposable income provided by job creation, offsetting the loss of purchasing power of wages.

Likewise, it points out that the labor market will reflect the recovery of the economy, although to a lesser extent than in 2021 due to the disappearance of the effects of reopening activity. Specifically, it provides for the creation of 850,000 jobs in full-time equivalent for the next two years, less than estimated for last year.

The improvement in employment will be reflected in the unemployment rate, which would drop from 13% at the end of 2023, although it will still be, together with Greece, one of the highest in Europe.

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Funcas has also lowered the public deficit forecast for this year because in 2021 it was “much lower” than expected. For 2022, it forecasts a deficit of 5.7% of GDP and 4.8% in 2023.

Regarding the evolution of prices, the CPI will stand at an annual average of 3.7% in 2022 and 2% in 2023. Funcas indicates that the Underlying inflation it will also converge towards these levels as price increases become more widespread.