The biannual Economic Perspective report estimates that GDP will close this year with growth of 4.7%, three tenths above the estimate in previous forecasts, published in September. On the other hand, for 2023 growth has been set at 1.3%, two tenths less.
In this new edition of macroeconomic estimates, due to the early end of the year, the OECD has included an additional year in its outlook horizon. The projection for 2024 is that the Spanish economy will expand at a rate of 1.7%.
“Growth is expected to slow down in 2023 and remain subdued in 2024, mainly due to the depressing effect of inflation on household purchasing power and weaker prospects for external demand,” the Paris-based agency said.
The OECD report published in September only included GDP forecasts, so in order to compare the new deficit, inflation or unemployment data, it is necessary to compare them with the previous report, published in June.
Specifically, the OECD considers that the unemployment rate in Spain will be 12.9% in both 2022 and 2023, compared to the previous forecast that expected 13.6% this year and 13.9% next year. The new forecast for 2024 has been located at 12.7%.
On the other hand, the level of the public deficit for 2022 will be 4.9%, one tenth less than the estimate in June, while the forecast for 2023 has remained unchanged at 4.2%. The forecast for the following year has been placed at 3.7%, reports Efe.
Regarding the increase in prices, he expects inflation to reach an average rate of 8.6% in 2022, five tenths more than the previous forecast. The estimate for 2023 has remained unchanged at 4.8%, while for 2024 the OECD has decided to also place it at that rate.
The OECD forecast for 2022 is higher than that used by both the Government and the rest of the large institutions. Thus, compared to the 4.7% estimated by the OECD, there is a forecast of 4.4% by the Government, 4.5% by the Bank of Spain and the European Commission and 4.3% by the International Monetary Fund (IMF). . For 2023, on the other hand, the OECD forecast is higher than that of Brussels (1%) and the IMF (1.2%), but lower than that of the Bank of Spain (1.4%) and the Government (2 ,1%).
The ’think tank’ of advanced economies is confident that inflation will continue to fall in Spain, mainly due to the base effect related to energy prices, as pointed out by the OECD Secretary General, Mathias Cormann.
However, he warns that inflation is expected to remain high in 2023 and 2024. “We are assuming the gradual withdrawal in 2024 of measures such as tax cuts that have mitigated the impact of rising energy prices.”
Regarding growth, the Australian has highlighted the resilience of economic activity in Spain, pointing out as one of the factors that Spain “has been less dependent on Russian energy imports”, as well as the measures implemented by the Government and investments significant amounts of European funds, which have softened the effect of the crisis caused by the war in Ukraine.
“We are talking about a very healthy rebound in 2024, with one of the highest growth rates in Europe. We believe that it is going in the right direction,” Álvaro Santos Pereira, acting chief economist of the OECD, indicated at a press conference.
