He Funcas panel published this Tuesday warns that the effects of DANA In Valence could affect the Gross domestic product (GDP) of Spain in the last quarter of 2024. In addition, analysts have warned that the country’s inflation will be above 2% until 2026, that is, above the level at which central banks place price stability.
Specifically, the Committee projects that the general inflation rate will increase for the remainder of the year through the end of December to 2.4%. The forecast of the annual average for 2024 is 2.8% for the general – two tenths less than in the previous Panel – and 2.9% for the underlying -a tenth less-. For 2025, the average annual forecast is 2.1% for general and 2.2% for underlying, with an annual change of 2.2% in December.
“The Governing Council of the ECB (European Central Bank) considers that the best way to maintain price stability in the euro zone is to have an inflation target of 2% in the medium term”, explains the Bank of Spain. Therefore, Spain will experience high inflation for at least another year, according to Funcas.
Experts predict that although employment will grow more slowly in 2025, the unemployment rate will continue to decrease. Job growth estimates for 2024 stand at 2.2%, while for next year it remains at 1.7%. Concerning the average annual unemployment rate, it is expected to close at 11.5% this year and decrease to 11.1% in 2025.
On the other hand, for Funcas, national demand will contribute 2.5 percentage points to Spanish GDP, five tenths more than in the previous analysis. For its part, the forecasts of private consumption and especially that of the public, are revised upwards, while that of investments is downwards.
The contribution of foreign sector This will be five tenths (one less than the previous Panel), with a slight downward revision for exports and imports.
Effects of DANA on GDP
The Funcas panel warns that “a negative impact on growth in the fourth quarter is expected due to DANA, which fundamentally affected the province of Valencia“.
However, the foundation’s publication does not yet specify what the real impact on the economy and its worsening of the natural disaster which devastated entire cities in the Levant may be.
However, as OKDIARIO progressed, certain sectors were completely left aside by the government in its aid. This is the case of automotive sectorwhich has been excluded from the aid that the Executive will distribute to try to relieve the symptoms of DANA.
This sector is precisely one of the most affected by the disaster, as thousands of cars became completely unusable after the storm, forcing many affected people to obtain transportation again.
