Ibercaja, which in December feared a “sharp slowdown” as a result of the energy crisis, has revised its forecasts upwards thanks to Europe being able to weather the storm and “avoid the most negative scenarios”. As a result, it has revised its forecasts for Spanish GDP growth upwards, and now places it at 1.2% for this year.
“There was no apocalypse in energy prices and GDP has not fallen as expected, but although inflation fell in electricity and gas, food prices have skyrocketed to levels not seen in decades,” summarized Santiago MartÃnez, head of Economic and Financial Analysis of the entity, during the presentation of the latest issue of the magazine EconomÃa Aragonesa.
The bank ensures that the industries most exposed to the rise in energy prices and a scenario of gas rationing in a large part of Europe have resisted “better than expected”.
Also that the productive fabric or employment has not been destroyed, and that the effects on the economy as a whole of a low-intensity energy crisis have occurred “exclusively through the price channel”.
In this sense, they consider that the strong growth of these prices registered in the first months of the year is the “main threat” to world economic stability, both because of the damage caused by inflation and because of the monetary indebtedness that it entails.
“The rises in interest rates, unprecedented in recent decades, will affect the finances of families, companies and an indebted public sector,” they advanced.
For his part, Antonio MartÃnez, director of the Financial Area, elaborated on these realities. The economy has resisted “better than we expected” and in the end it has not suffered such a severe scenario of energy crisis.
However, the “more nuclear” inflation, the underlying one, has not stopped marking maximums, while the central banks have continued to raise rates, so “it is impossible to think that the rate hike will not have an impact on indebted economies â€, he added.
As a result of this situation, the entity has lowered its GDP expansion forecasts for 2024, which now stands at 1.5% compared to 2.6% before.
With regard to the situation of companies, Ibercaja believes that companies are going to suffer both the sharp rise in interest rates and the gradual acceleration in wages. For this reason, they predict that it will be difficult for them to face increases in the workforce and expect “a stagnation in the labor market after a more positive recovery than expected”.
