July 5, 2022

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Economic growth forecast continues to decline

Economic growth forecast continues to decline

distance Gross domestic product In the first quarter it was lower than expected (+0.3%) Savings Banks Corporation rate increased economic inflation A revised downward revision of growth estimates for this year. Out of a total of 19 panelists consulted Funcas15 have worsened their expectations and believe that 2022 will conclude with Economie It grows 4.3%.

The bearish outlook is mainly due to weak domestic demand, which will continue next year.

According to Funcas experts, national demand will contribute 3.3 percentage points, eight-tenths less than expected in March, “with A sharp downward review of consumption and public and private investmentEspecially in the construction branch. The foreign sector will add one point to the GDPwhich is an improvement of three-tenths due to lower expected growth in imports.

“Prospects for recovery are dim in both Spain As in the rest of the major countries due to heightened uncertainty around the world. They explained that geopolitical and supply shocks exacerbate inflationary pressures, which leads to a tightening of monetary policy, with a consequent impact on demand.

By 2023, they expect GDP growth to be 3%, “which means a slowdown of 1.3 points as a result of weakening the contribution of national demand and, above all, due to the empty contribution of the foreign sector.”

As for the labor market, they state that the pace of employment growth will “slow down”. For this year, the median estimate has been cut by six-tenths to 2.9%, while the forecast for 2023 stands at 1.9%. As for the unemployment rate, it will “continue to decline” to 13.7% in 2022 – two dozen lower than in the previous panel – and to 13.2% in 2023.

Inflation increased, but decreased

Consumer Price Index (CPI) decreased by 0.2% in April, which put the inflation rate at 8.3%, that is, 1.5 points less than in March. However, the core rate (the main indicator excluding unprocessed food and energy products) rose one percentage point to 4.4%, while core inflation, which excludes all food and energy products, rose to 3.3%.

Realizing what Funcas predicted, inflation peaked in March, and started declining in April due to lower energy products (lower electricity and fuel).

Despite the decline in energy products, experts warn that “inflation in the remaining components of the CPI continues to rise, due to the intensification of the shift to final consumer prices to increase production costs. Thus, in April, “the number of CPI subcategories with an inflation rate above 4% was 106, compared to 94 in the previous month and 14 in April 2021.”

Due to inflationary tensions, the average inflation forecast for this year was revised down by 1.5 percentage points, i.e. up to 6.9%. “In the coming months it will decline to finish at an annual rate in December of 4.3%” and for 2023, committee members expect a moderation to an average annual rate of 2.2%.

More information on the economic outlook

Funcas cuts GDP growth forecast by about one and a half points

IMF raises expectations for Europe, but rules out recession

Funcas expects inflation to start declining this month

Inflation is a global problem

According to reports from International Monetary Fund (International Monetary FundThis year, inflation could average 7.4% globally, with emerging and developing economies being “the hardest hit,” according to an infographic from Statistics. In most advanced economies, inflation is estimated to be around 5.7%.