The Chamber of Commerce of Spain has reduced its growth forecasts from the Spanish economy by 2021 of 5.9% to 4.7% and from 6.2% to 5.5% by 2022, after noticing that the recovery of the economy Spanish, after the historic crash caused by the pandemic, loses the initially expected bellows.
This strong downward revision is explained by the scarcity of components, the increase in certain raw materials and supplies and before the rhythm of execution of the European Funds 'Next Generation EU' lower than the planned.
As regards domestic demand, the component experienced by the greatest rebate is the gross formation of fixed capital, which will grow by 3.3% in place of 7.1% estimated above, mainly due to the Investment under construction, which will experience a decrease of 2.8%, against the advance of 4% foreseen at first. This setback obeys both an increase in the demand for housing and civil work lower than expected, as at the slightest rhythm of the European funds.
This is also the cause of the least dynamism of public consumption, which will grow by 3%, compared to 4.8% prior to previously, and 2.3% by 2021.
Problems of supplying goods, components and raw materials will be noted in external demand, with lower export growth and, above all, imports, although the external sector maintains its strength with increases in exports of 12 , 6% this year and 11.6% next, and imports with an increase of 10.7% and 9.7%, respectively.
Despite the slowdown in the rhythm of growth of the economy, the labor market will behave better than expected. Thus, the Chamber of Commerce has reviewed the forecast of job creation, both in 2021 and in 2022, while a more accused decrease in the unemployment rate is expected, which will be at 15.3% this Year and 14.4% next, at average. Between 2021 and 2022, the creation of 1.6 million jobs is foreseen.
In relation to inflation, an increase in the IPC of 2.7% annual average is foreseen this year and 2.6% the following, practically duplicating the estimated average rate prior to 2022, 1.4%.
In this sense, the Chamber expects the tensions that are taking place in the prices of supplies and raw materials are reflected in underlying inflation, especially next year, when an average rate of 1.5% is anticipated, Against 0.6% estimated for the set of 2021.
In this context of slower economic recovery than expected and growing inflationary tensions, it is essential to undertake the investments and structural reforms that the economy demands. For this, the recovery, transformation and resilience plan, supported by the Next Generation EU funds, represents a historical opportunity to modernize the productive tissue and to promote activity and creation employment.
In parallel, the Chamber has urged a credible medium-term commitment to reducing the deficit and public debt. "If you do not advance in this sense from this moment, the Spanish economy could be difficult for a hypothetical review of ECB stimulus programs, to stay over time the current inflationary environment," he warned.Updated Date: 08 November 2021, 10:53