The Funcas panel lowers its GDP growth estimate for this year by half a point, to 4.3%

They raise average inflation to 6.

The Funcas panel lowers its GDP growth estimate for this year by half a point, to 4.3%

They raise average inflation to 6.9% in 2022, one and a half points more than the previous forecast


The Funcas panel of analysts has lowered its estimate of GDP growth for this year by half a point, to 4.3%, due to a worse than expected evolution of the Spanish economy during the first quarter.

In total, 15 of the 19 panelists have worsened their estimates after a lower than estimated GDP growth in the first quarter, the weakness shown by the few indicators available so far for the second quarter and the expectations that there will also be lower growth in the remaining quarters of the year.

National demand will contribute 3.3 percentage points to GDP growth, eight tenths less than the March consensus, with a strong downward revision of public and private consumption and investment, especially in the construction branch.

On the other hand, the foreign sector will add one point to GDP, which represents an improvement of three tenths due to the reduction in the expected growth of imports.

Experts have highlighted that the prospects for recovery are clouded both in Spain and in the rest of the main countries due to the intensification of uncertainties throughout the world. "Geopolitical and supply shocks aggravate inflationary pressures, leading to a tightening of monetary policy, with the consequent impact on demand," they pointed out.

For its part, the consensus forecast for GDP growth in 2023 stands at 3%, which would mean a slowdown of 1.3 points compared to this year as a result of the weakening of the contribution of national demand and, above all, all due to the null contribution of the foreign sector.

Inflationary tensions have led analysts to revise upwards the average inflation forecast for this year by 1.5 percentage points, to 6.9%. However, they estimate that in the coming months it will fall until ending with an interannual rate in December of 4.3%.

For 2023, the panelists foresee a moderation to an average annual rate of 2.2%, with a year-on-year rate of 1.8% in December. Core inflation would be 3.6% and 2.4%, respectively, in 2022 and 2023.

As for the labor market, the pace of employment growth will slow down. Thus, the average estimate for 2022 has been reduced by six tenths, to 2.9%, while the forecast for 2023 stands at 1.9%.

For its part, the average annual unemployment rate will continue to fall, to 13.7% in 2022 -two tenths less than in the previous panel- and to 13.2% in 2023.

As for public finances, the panel of analysts foresees a reduction in the public deficit in these two years. In 2022 it would stand at 5.5% and in 2023 at 4.8%, which would mean a deviation of five and nine tenths, respectively, compared to the Government's forecast.