The Funcas Panel cuts its GDP forecast by one tenth in 2022, to 4.2%, and triggers inflation to 7.9%

It cuts five tenths, to 2.5%, its forecast for 2023 and raises nine tenths the average inflation next year to 3.1%

MADRID, 20 Jul. (EUROPA PRESS) -

The Funcas Panel has cut one tenth the expected growth of the Spanish Gross Domestic Product (GDP) for 2022, to 4.2%, and has revised upwards its forecasts for average inflation this year, to 7.9%, one point more than its previous estimate.

From the Panel they explain that although the indicators available for the second quarter show an acceleration of growth, driven by services, at the end of the year it will slow down due to the strong rise in inflation and the uncertainties derived from the war in Ukraine and its impact on energy markets, factors that also increase concerns about the global economic outlook.

All in all, this year, experts foresee increases of 0.5%-0.4% in the central quarters of 2022 and estimate an average growth of 0.3% in the last one, below what was forecast in the May Panel .

The lower rate of growth expected for the second half of the year affects the rate forecast for 2023, which has been cut by five tenths, to 2.5%. As for the quarter-on-quarter profile, the panelists expect it to recover throughout the year, with rates between 0.7% and 1%.

On its side, the average inflation forecast for 2023 rises to 3.1%, nine tenths more than the May estimate. The forecasts for the core have been revised by a similar magnitude, to 4.6% and 3.3% for 2022 and 2023, respectively.

Inflationary pressures - to levels unprecedented since the 1980s in advanced economies - have forced a change in monetary policy. The panelists anticipate that market interest rates will continue to rise until 2023. The Euribor would reach 1.8% at the end of the forecast period, compared to 1% in the previous Panel, and the 10-year bond yield would be close to 3 %, half a point more than in May.

The positive evolution of the labor market in the first part of the year has led to an upward revision of employment growth forecasts and a lowering of unemployment forecasts. Thus, the expected average unemployment rate for 2022 drops two tenths, to 13.5%, and would drop to 13.1% in 2023.

On their side, the panelists expect a reduction in the public deficit this year and the next, with an improvement of three and one tenth, respectively, in relation to the previous Panel. The negative balance of public accounts would be 5.2% of GDP in 2022 and 4.7% in 2023, more pessimistic forecasts than those of the Government.

The Forecast Panel for the Spanish economy is a survey carried out by Funcas among 19 analysis services. Based on the responses, the "consensus" forecasts are offered bimonthly as the arithmetic mean of the 19 individual forecasts