The Spanish economy will do better than expected this year and next. The Organization for Economic Cooperation and Development (OECD) has updated its forecasts for the country this Wednesday, raising GDP growth this year by four tenths over its March projection, to 2.1%, and by another two tenths for in 2024, at 1.9%. Despite a “challenging environment” due to the war in Ukraine, “the Spanish economy has held up remarkably well.”
The OECD points out that business and consumer confidence has improved since last autumn, although consumer confidence remains very low. It’s going better, but it’s still not an ideal situation.
The forecast for this year coincides with that of the Government, although it is below the forecast for 2024, when the Executive of Pedro Sánchez points to a 2.4% advance. The entity does recognize that next year the country will benefit “from considerable public spending” for the Recovery Plan, which thanks to this Tuesday’s addendum will allow access to another 84,000 million in credits and 10,300 million in transfers.
The panorama does not finish clearing up of unknowns. It is noted that an escalation of the war in Ukraine could drive up energy prices. There is also the front of increasing macro-financial vulnerabilities, as rapidly rising interest rates could increase the risk of financial contagion through the global financial system.
Spain maintains a growth higher than that of the euro area, which will rebound to 0.9% in 2023 and 1.5% in 2024. The German locomotive will stagnate this year and advance by 1.3 in 2024; France will grow by 0.8% and 1.3%, respectively; and Italy 1.2% this year and 1% the following.
