Brussels Upgrades Spain's Economic Outlook To 1.4% Growth in 2023

The European Commission has released its winter economic forecasts, indicating that while adverse conditions persist, the EU will avoid a recession and grow by 0.9 percent in 2023.

"The EU economy should avoid the economic recession previously predicted," says one of the first sentences of the European Commission's winter forecast.

Despite lingering challenges, including rising inflation and energy costs, the Commission sees mild economic expansion on the horizon.

In light of these projections, the Spanish economy is expected to see growth of 1.4 percent this year, four-tenths above the 1 percent predicted in the autumn forecast. The economy is projected to continue to grow, reaching 2 percent in 2024.

These updated forecasts represent an improvement from the Commission's earlier predictions of a technical recession in the EU. The EU and the Eurozone are now expected to "barely avoid" a recession, with growth projections of 0.8 and 0.9 percent respectively, for 2023.

Inflation rate set to fall

In addition, the Commission notes that the three consecutive months of lower inflation suggest that prices may have reached their peak in October when the rate reached 10.6%. With January's data showing prices at 8.5 percent, the Commission expects prices to continue to decline to 6.4 percent throughout the year and reach 2.8% percent in 2024.

Despite a slowdown in the third quarter of 2022, the European economy saw robust growth in the first half of the year, with an annual growth rate of 3.5 percent in the EU and the Eurozone. The diversification of energy supplies and the decline in consumption has had a positive impact on energy prices and the labour market remains strong, with the unemployment rate at a record low of 6.1 percent.

Economic activity is expected to continue to grow in the first quarter of 2023, driven by increasing confidence and optimism.

In regards to Spain’s economy, the European Commissioner for the Economy, Paolo Gentiloni explained that it had “withstood the negative shocks triggered by the war relatively well,” growing by 5.5 percent in 2022, one percent more than expected in the autumn.

He went on to explain that “Tourism was a major driver of economic activity last year and is expected to remain so this year and next. The economy is expected to continue to evolve by 1.4 percent in 2023 and 2.0 percent in 2024.”

Sources

https://elpais.com/economia/2023-02-13/bruselas-descarta-que-la-union-europea-entre-en-recesion-este-invierno.html
https://todaytimeslive.com/economy/216516.html