The forecast of the harsh winter that awaits the European economy also falls, albeit tenuously, for the Valencian Community. "The important thing is to get through the winter, to see to what extent Europe goes through it," said Rafael Doménech, Head of Economic Analysis at BBVA Research, who this morning presented the latest report from the forecast entity for the Valencian economy.
According to the economist, the estimate is that by the end of 2022 the economy will have finally grown by 4.8%, while for 2023 he lowers the forecasts to 0.7% -from the forecast 1.8%-, although he has indicated that "This figure must be interpreted as quite positive because after these quarters of negative growth, the fact that it manages to avoid recession for the year is good news."
In the picture for the next financial year, we must be attentive to factors such as household consumption, but also to external tensions. "We are going to have a significant slowdown in private consumption and there is going to be a slowdown in external demand; the energy shock is going to affect tourism and there are risks from the international environment, so we need to solve the bottlenecks," he said. summarized Doménech, who was accompanied at the press conference by Carlos Rodríguez, Eastern Regional Director of BBVA, and David Conde, Eastern Territorial Director of BBVA.
In summary, if these forecasts are fulfilled, the Valencian Community would create, on average, some 87,000 new jobs per year between 2021 and 2023, which would place the unemployment rate at 13.9%. The figures would have a lot to do with the boost in exports of goods throughout 2023, where "a weakening is not being noticed."
In fact, according to the Valencia Chamber, foreign trade in the Valencian Community registered "record figures" in the first eight months of the year, due in large part to the increase in prices, both in exports and imports, according to the report. This escalation is reflected in the export price index for industrial products, which "in 18 months has gone from having zero annual growth to exceeding 14% in June 2022," explains this report.
However, after the champagne effect in sectors of great importance for the Valencian GDP, such as tourism, BBVA argues that the data for recent months show the slowdown in activity and reduce growth in the tourism sector. For example, card consumption data shows a slowdown in activity in the third quarter. The negative growth differential with Spain would be due to worse prospects for tourism, particularly abroad, as a result of the slowdown in European demand.
"The Valencian Community has gained market share in tourist spending," said the expert, although the data in the report reveal that it could now register a drop in GDP in the third quarter.
Another aspect highlighted by the analyst is "the dynamism" in the bidding for public works, a phenomenon that is produced by the push of European funds, he points out.
In his observation, he explained that the largest volume of tenders multiplies by up to four times the figures for 2019 and that the start-up and execution of the Recovery Plan would be behind the largest volume tendered since mid-2021. In fact, more than 15% of the public works tender is being financed with European funds, he remarked.
