Good news for the Spanish and European economy. Brussels confirms in its economic forecasts that the eurozone will avoid recession in 2023, despite forecasts that predicted otherwise at the end of last year. According to the calculations of the Community Executive, the twenty euro countries will close with 0.9% growth. As for Spain, it will be 1.4%, four tenths more than expected last year, thanks to the boost from tourism.
The bad prognosis that was warned last autumn with a technical recession derived mainly from a slowdown in the German economy does not seem to be confirmed. The European economy grew notably in the third quarter of last year and, despite the uncertainties, the Executive estimates that growth in 2022 was 3.5% for both the euro area and the Twenty-seven. Looking ahead to next year, the growth rate is maintained, with 1.6% in the EU and 1.5% in the euro area.
A fairly clement autumn and winter have also helped to reduce gas consumption in Europe, which has allowed prices to not rise further and, therefore, not inflation either, with prices that had not been seen since before start the war in the Ukraine. Employment has also remained stronger than expected, with an unemployment rate of just 6.1% in the EU as a whole, the lowest in the historical series, at the end of 2022.
However, the European Commission asks not to let your guard down. Energy prices remain high, which significantly affects the pockets of citizens and companies. Although inflation seems to have peaked, core inflation (which excludes energy and fresh food) has not, which has continued to rise. After hitting a record 10.6% last October, inflation has already started to slow down to 8.6% in January.
According to forecasts, inflation will fall to 6.4% in 2023 and it will not be until 2024 that it will moderate to 2.8% in the whole of the Twenty-seven. In the eurozone countries it will be 5.6% in 2023 and 2.5% in 2024.
The uncertainty, in any case, persists, in that growth will be closely linked to what happens with energy prices, the events in the war in Ukraine, but also the opening of China. The end of its zero covid policy could cause an increase in demand and also in the prices of hydrocarbons.
For its part, Spain will maintain good growth prospects, despite the fact that the economy falls significantly, from 5.5% in 2022, to 1.4% this year and with inflation also high, 4.4% this year, four tenths less than expected also last autumn. The effects, however, can be mitigated to a large extent by the measures announced by the Government, such as the reduction of VAT on food or an additional discount for vulnerable households on the energy bill.
"Spain weathered the negative effects caused by the war relatively well in 2022, expanding by 5.5%, a point more expected in the autumn," said the Commissioner for the Economy, Paolo Gentilioni.
Spain, thus, is the country that grows the most of the large economies of the Eurozone. Above Germany, which finally manages to also avoid the recession (with 0.2%), France (0.6%) and Italy (0.8%).
However, it is a much less positive forecast than that provided by the government, which calculates that it will close with 2023 with 2.1% growth.
