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Goldman Sachs joins the trend and predicts lower growth in Spain

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Growth in the Spanish economy will slow significantly next year, when GDP expansion will be 0.6% compared to 4.6% US bank Goldman Sachs has forecast for this year, which expects a mild recession for the entire euro area as a result of the energy crisis. Thus, predicting the dominant Wall Street factor This is two tenths above what the Spanish government managed for 2022But for 2023 Moncloa envisages a lower growth of 2.1% than expected.

Similarly, Goldman Sachs’ forecast is more optimistic this year International Monetary Fund (IMF)which provides for a 4.3% expansion in 2022Also of the European Commission, J 4.5% growth is expected this year. However, looking to 2023, the US Bank is more pessimistic about Spain, as the IMF forecasts an expansion of 1.2% and the EC of 1%.

In any case, Goldman Sachs points to Spain as a major European economy that will perform best in recent years, because A mild recession is expected for the EurozoneWith a decline in Germany and Italy’s GDP in 2023. Thus, The organization predicts that the euro zone economy will grow by 3.3% in 2022 Going back a tenth in 2023 and rising again to 1.4% a year later.

Among the main euro economies, apart from Spain, The bank expects Germany to grow by 1.8% in 20222023 is projected to contract by 0.6% and rebound by 1.4% in 2024, while France will grow by 2.5% in 2022, 0.1% in 2023 and 1.3% in 2024. from your side, Italy will register an expansion of 3.8% It will contract by 0.1% next year and grow by 1.3% in 2024.

“The energy crisis will push the European economy into recession this winter (…) but now we see a less deep recession, because Data has been incredibly resilientThe rebalancing of the gas market has reduced the risk of energy rationing and governments have provided significant financial support.

Thus, he now expects economy The euro area will contract by just 0.7% between the fourth quarter of 2022 and the second quarter of 2023, compared to 1.1% previously. In this respect it is worth noting Germany and Italy will be hit harder by the energy crisis than France and Spain. In any case, the bank warned that the gas supply situation in Europe remains fragile, while fiscal policy is likely to slow growth in 2023-24 due to reduced energy support. The gas crisis is likely to cause major losses on the supply side.

“Therefore, we see a moderate recovery and lower our growth forecast for the second half of 2023 and the first quarter of 2024,” it adds. In relation to inflation, although gas prices have come down significantly, the company expects Peak in DecemberGiven that core inflation is likely to moderate gradually in 2023, although it is expected to “A sticky service inflation“Core inflation is expected to close in at 3.1% in 2023 and 2.2% in 2024, due to continued pressure from labor and energy costs.

In this sense, he notes that 2023 will be a key point to consider Labor cost pressures, expecting the unemployment rate to rise from 6.6% to 7.2% in the second quarter of 2023 due to the recession. “Combined with persistently high headline inflation, We expect wage growth to average 4.5% In the first half of 2023, before relaxing by the end of 2023″, the institute indicates, the stabilization of long-term inflation expectations suggests that the risk of pronounced second-round effects “remains limited”.

The ECB will raise rates by one and a half points

On the other hand, facing reduced risks of a deep recession in the Eurozone and continued inflationary pressures, Goldman Sachs expects The European Central Bank (ECB) will raise interest rates by an additional 150 basis points by May 2023.The reference rate stands at 3.50% and the deposit rate at 3%.

In this sense, the bank bets because the ECB The pace of rate hikes will slow down to 50 basis points At its December meeting, parallel to the Federal Reserve. Likewise, it maintains its forecast for another hike of half a percentage point in February but, given the prospect of strong demand, now expects two additional hikes of a quarter each at meetings in March and May.

In this regard, Goldman Sachs admits that its expectations of a Upside risk linked to potentially more persistent core inflation and downside risks related to the possibility of a deeper recession or potential rebound of sovereign risk in Italy.

Source: lainformacion.com

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