Spain Economic Outlook. October 2023

Summary

Spanish GDP growth forecast in 2023 is maintained at 2.4%, and the forecast in 2024 is revised down to 1.8%, given the declining global outlook, particularly in Europe, in an environment of high uncertainty. Added to this is the increase in oil prices.

Key points

• Key points:
• The global economic slowdown is confirmed, with differences across regions. Looking ahead, global growth is projected to moderate to 2.9% in 2023 and 3.0% in 2024.
• In Spain, activity growth could moderate over the coming months and there is a downward bias on forecasts. Economic policy uncertainty may increase.
• Employment productivity would have shown an unexpected fall in the second quarter of 2023, and there is a weakening in job creation across the board. The moderation in the services sector is notable.
• Supply-side problems are perceived in certain sectors and domestic demand will be constrained by high interest rates and the necessary reduction of the public deficit in 2024.
• The recovery may continue, albeit at a slower pace, thanks to the strength of household balance sheets; normalization in industrial activity; support from accelerating European funds; and an increase in the working-age population.

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