Spain Economic Outlook. December 2022

Summary

GDP growth forecast is revised moderately upwards to 4.6% in 2022 and 1.2% in 2023. The economy is holding up better than expected and the probability of recession is reduced. Activity will gain traction as NGEU funds are implemented and uncertainties dissipate, and will grow by 3.4% in 2024.

Key points

• Key points:
• Global economic growth is set to slow in 2023. Global GDP is projected to grow 2.3% in 2023 after rising 6.3% in 2021 and about 3.3% in 2022. Uncertainty is high and risks are tilted to the downside.
• In Spain, GDP contraction over the coming months cannot be ruled out. Household spending will be affected by rising prices, increased uncertainty, slower employment and higher interest rates.
• Inflation slowdown will continue, and gas supply problems are unlikely. Companies and households are better prepared for a more volatile environment. There are no imbalances in economic sectors.
• There continued to be several factors that could cause the scenario to deteriorate. Geopolitical tensions could spread. A possible return to total confinement policies in China would compromise the availability of inputs. The lack of a rents pact would lead to continued high inflation.

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