The government has raised the GDP (Gross Domestic Product) growth forecast by three tenths, to 2.7% in 2024, in the new economic framework that the Council of Ministers will approve this Tuesday. The Minister of Economy, Carlos Body, confirmed this Monday in a television interview the update of his projections with significant improvements.
“What we have seen in recent months is a continuous upward adjustment of forecasts for the Spanish economy by absolutely all analysts, national and international, and we are going to follow what the experts are doing and we are actually going to update our forecasts upwards for the next three years,” Body explained. “Tomorrow I will present this update of the macroeconomic forecasts to the Council of Ministers, and I can anticipate that for 2024 we will raise our growth forecasts from 2.4% to 2.7%,” he added.
Last week, the Bank of Spain revised its projections, with an improvement of almost 15 billion, or more than a step in the advancement of economic activity between 2024, 2025 and 2026. For this year, the institution increased GDP growth by half a point, from 2.3% to 2.8%. Mainly due to the better prospects of the foreign sector, especially tourism, “which is prolonging its momentum”. Also due to exports of non-tourist services and the drop in imports, thanks to the effect of the transition to renewable energy in Spain.
In 2025, the increase in growth is estimated at three tenths, up to 2.2%. In 2026, by two tenths to 1.9%. In the next two years, “domestic demand” will take over from the external sector. Family consumption and business investment will wake up and will be the main driver of activity, favored by the fall in interest rates and inflation – estimated at 2.9% in 2024, 2.1% in 2025 and 1.8% in 2026 -, due to the increase in confidence. and the recovery plan, according to the analysis of the Bank of Spain.
In the last two months, 13 analyst houses that make up the Funcas Panel have revised upwards their growth forecasts for 2024 and nine for 2025. All but one are already above the government’s forecast of 2.4% for this year. 19, in total, according to this Reference Committee on macroeconomic projections of our country. Among them, AFI and Oxford Economics reach 2.8%, as do the Bank of Spain and CEOE, 2.7%.
These forecasts are supported by the correction of the National Accounting of the INE. “Not only thanks to the best data we have, but also in light of the revision of the stunting, we will also update our forecasts,” said the Minister of Economy, Carlos Body, in another television interview. last Thursday.
The third major correction of the National Accounts by the INE has once again improved the picture of the Spanish economy – and it will be even more positive because the figures still do not add up, as this analysis explains.
“The GDP revision allows us to remove a first stage of uncertainty about the evolution of our country’s economy. The results indicate better behavior from several angles, but also various unknowns about consumption patterns, investments and company profits,” emphasizes expert Miguel Artola in another analysis published in elDiario.es.
Along with the various inequalities (wealth, gender, etc.), the rise in real estate prices is the big problem in our economy, and could perpetuate the weakness of family spending. Another threat is the risk that the Government will not be able to approve the General State Budgets (PGE). Furthermore, the Bank of Spain considers that in order to comply with the budgetary rules of the European Union (EU), reductions and adjustments would have to be made that would affect all projections. However, before October, the multi-annual plan that Spain will have to send to the European Commission will not be known.
