PwC cuts GDP for Spain by almost two digits in 2023, putting it at 1.1%
Experts and directors at PwC Economic and Business Consensus have cut their growth forecasts for the year by a tenth. Spanish gross domestic product (GDP) this year., to 3.9%, and lowered their forecast for 2023 by almost two points, from 3% to 1.1%. This follows from PwC’s latest report on financial and business consensus, For the fourth quarter of the yearIn which experts and directors spoil their opinion on the evolution of activities in Spain a year ahead.
51.3% of experts describe the current situation of the Spanish economy as regular, and their position becomes more pessimistic when asked about their condition. In the first quarter of next year, from 71.8% It is guaranteed to spoil. For this reason, the panelists lowered their growth forecast for 2023 gross domestic product from 3% to 1.1%, putting them below Bank of Spain estimates (1.4%), from the International Monetary Fund (1.2%) and from the government (2.1%).
67.8% of companies expect a decline in productive investment
According to the report, economic activity will slow due to reduced demand from households for consumption and especially home purchases. 59.3% of the panelists agreed Households’ financial situation is stable and 70.3% expect it to worsen in the first quarter of next year. In fact, 74.6% expect so Consumption will decrease for the next six monthsAnd the same thing happens with 85.6% of housing purchases, probably due to rising interest rates and rising mortgage prices.
Regarding companies, their economic and financial situation is qualified as regular by 70.1% of the experts and managers surveyed, who, in addition, expect that Deteriorates in the short term. Looking ahead to the next six months, 67.8% of firms forecast a decline in productive investment and 75.4% forecast job creation. However, they are better off compared to families Based on the evolution of exports. In this sense, 47.5% of experts confirm that they will remain stable, at least until the middle of 2023, a situation that is benefiting from the fall of the euro against the dollar.
Low cost strain
Inflationary pressure begins to ease – from 63.4% to 58.4% -, Percentage of experts who consider their companies Or people in your field of activity will continue to raise prices in the coming months, mainly due to increases in costs other than wages. On their side, they grow Five points, 40.6% who think Which will keep them stable, as a result, in this case, due to the stability of demand. All this improves the inflation forecast for 2022, compared to the previous consensus, from 6.6% to 5.5%, and estimates that price increases will be 4% in June 2023.
In the case of the Eurozone, 64.4% of experts believe that we are in the context of inflation not seen since the seventies, which is beyond the scope of the Eurozone’s work. European Central Bank (ECB), and ask the European Union to speed up measures. In addition, 52.9% warn that the ECB will have to adjust interest rate increases to the evolution of economic conditions, and only 25.2% believe that it should increase. Tightening of monetary policyGiven the negative evolution of core inflation and the high risks of second-round effects.
In the short term, 49.1% of the panelists expected prices in the euro zone to remain high, up by around 6%. The energy crisis will take years, although 37.1% It cannot be ruled out that the economic downturn could lead to further recession.
Measures to deal with rising prices
On what kind of actions can be taken to combat inflation, the panellists -85.7%-, are committed to structural reforms and Offer to drive innovation and productivityand advocates -64.7% – promoting dialogue with companies to find out what measures can help reduce their exposure Widespread reflexes production costs.
Experts do not have a clear opinion about how prices in Europe will evolve in the conditions marked by the end of the war in Ukraine. 39.8% believe that there will be a new phase marked by geopolitical tension and trade wars; 31.4% expect it to continue Equal percentage of moderation of economic globalization and transition process and equal percentage of structural reforms, success of economic and fiscal policy, Digitization and energy efficiency Promote price control. Indeed, only 11% believe that, once the war is over, inflation will return to pre-pandemic levels.
Effect of tax increase on PGE
For Spain, 71% of experts, managers and professionals interviewed believe that it is still too early to know whether growth has occurred. Inflation will acquire a more structural character. And when asked about the factors that worry them most about the future evolution of the CPI, they point to, firstly, rising energy prices and secondly, rising labor costs.
Regarding the impact of the 2023 general budget on the evolution of prices, 68.1% believe that tax pressures and increases in social contributions will lead to new costs for companies and consequently increase inflation. And 73.3% miss that public accounts are not with A Financial Consolidation Scheme.
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