Doménech (BBVA) estimates that GDP is growing at a rate of 0.6% in the first quarter

MADRID, 6 Mar. (EUROPA PRESS) -

The Spanish economy is growing at a rate of 0.6% in the first quarter of this year, which in annualized terms would translate into an increase of 2.4% annually, as stated this Wednesday by the head of Economic Analysis at BBVA. Research, Rafael Doménech, who has announced that the organization will improve its forecasts for the Spanish economy.

This quarterly increase in GDP of 0.6% would mean maintaining the same growth rate with which 2023 closed, since, according to data provided by the National Institute of Statistics (INE), yet to be confirmed, the Spanish economy registered in last quarter of last year a quarterly advance of 0.6%, three tenths more than in the previous quarter.

In statements to RNE reported by Europa Press, Doménech stated that the Spanish economy, and also the European one, will benefit from the "timid" drops that some interest rates, such as the Euribor, have begun to experience, and from the decline of oil and gas prices, which are "well below" the levels of a few quarters ago.

In any case, Doménech, who today will participate in the presentation of the 'BBVA Research Spain Situation' report, has warned that "there are many uncertainties ahead", starting with geopolitics, and that the year looks "quite complicated." , since elections are held all over the world, but also in Europe.

Asked if the improvement in GDP estimates will translate into a better forecast of the reduction of the public deficit, Doménech assured that there is "some doubt", since one of the reasons why "economic growth is biased upwards in 2024 is precisely a more expansive fiscal policy" than what BBVA Research had forecast for this year.

"The announcement to extend support measures to confront the war in Ukraine has also been extended to 2024, at least to the first half of this year, and this means that the spending policy is being more expansive. On the one hand "It is true that we have more economic growth and that can help income, but on the other hand, we are also having more spending due to this extension of fiscal stimuli," he explained.

BUDGETS AND INTEREST RATES

Asked if it is important for the Spanish economy to approve a new Budget, Doménech indicated that "it is always important that there be General Budgets and also that they enjoy the greatest possible agreement" to "clear uncertainties" for economic agents about what the economic policy measures that will be adopted in the coming quarters.

"And, above all, it is also important in order to have a little more clarity about the adjustment path that we have to negotiate with the European Commission in the coming months, once the fiscal rules in Europe have been approved again. This is going to force us to make a fairly demanding fiscal adjustment over the coming years, to go from a situation of high deficit like the one we have now to one of even a primary budget surplus," he added.

Doménech has defended the importance of political consensus on fiscal matters and to face the challenges of the economy, among which he has cited "the low growth of productivity and investment, both private and public, which has not completely recovered, and is far from yet to recover pre-pandemic levels.

"In the end, all this, these fiscal uncertainties, along with many other challenges that we have, we should try to reduce them or face them to improve the growth and well-being of Spanish society," said Doménech, who He added that the lack of political consensus can end up hindering the progress and economic growth of a country.

As for whether he expects the European Central Bank (ECB) to lower interest rates at its meeting this Thursday, the head of Economic Analysis at BBVA Research has indicated that his forecast is that it will keep them unchanged.

"We do not expect decreases to occur until the month of June, that is, at the end of spring, beginning of summer. And the reason is that, basically, what the ECB wants is to be sure that this path of decreasing inflation , which we have been in for some time, is fully confirmed. It is important that after all the effort we have made we do not throw so many sacrifices overboard and that in the end inflation picks up again," he added.