Economists maintain their GDP forecast for 2022 at 3.9% but lower their deficit and debt forecasts

Aug. 31 () –

The General Council of Economists (CGE) maintains its growth forecast for the Spanish economy for this year at 3.9%, but has revised downwards its estimate of the deficit and public debt due to higher income derived from inflation .

Specifically, the CGE has lowered its public deficit forecast by eight tenths, to 4.6% of GDP, and its public debt forecast by eleven tenths, which it now estimates will close the year at 114.2% of GDP. GDP.

According to the Financial Observatory of the CGE, the Spanish economy will register positive growth in the third quarter of this year thanks to the pull of tourism which, although it has not reached pre-pandemic levels, has had a “good behavior”.

Economists expect the tourist season to extend to September and to a lesser extent to October, although mainly with national tourism, and they foresee that in the last quarter of the year there will be a “certain stagnation” of the economy due to the slowdown in internal demand .

For all these reasons, the CGE maintains its growth forecast for 2022 at 3.9%, which will prevent the GDP figures from before the pandemic from being reached, as Germany and France have already achieved.

“The uncertainty in relation to the evolution of the economy remains. The energy crisis, supply problems in production, the war in Ukraine and, to a lesser extent, the pandemic that is still going on, mean that the economic situation, both in Spain, like the rest of the world, be worrying,” economists warn.

Regarding the CPI, the CGE maintains its forecast of reaching an average inflation of 8.3% this year. Economists point out that high inflation in Europe will encourage interest rates to rise, even if this means weighing down growth. In turn, this will cause a slowdown in the mortgage and housing market due to the rise in the Euribor, they point out.

Economists also maintain their forecast for the unemployment rate at around 12.4% for the end of the year.

DEFICIT AND DEBT

What they have modified, in this case downwards, are their deficit and public debt forecasts due to the higher collection derived from inflation.

Specifically, the CGE has cut its public deficit projection for this year from 5.3% to 4.6%, although it warns that in 2023 inflation will have a great impact on spending due to the impact of the revaluation of the pensions with the CPI.

At the same time, the economists point out that the increase in tax collection is making it possible to reduce public administration debt, which is why they estimate that it will stand at 114.2% of GDP at the end of the year, just over one point per below its previous forecast (115.3% of GDP).