The Savings Banks Foundation (Funcas) has drastically cut its growth forecast for the Spanish economy for next year to 0.7%. Therefore, well below both Airef's calculations, which today has set it at 1.5%, and of course those of the Government, which maintains a very optimistic 2.1% in its budgets. Funcas figures represent a cut of 1.3 points compared to their previous forecast.
In addition, Funcas points to a technical recession that could occur by chaining negative growth in the last quarter of this year and the first of 2023. "A short recession" according to Funcas, which would be followed by a slight recovery from the second quarter of next year when the pressure of energy prices is reduced and the process of raising interest rates is paused.
"After a negative start to the year, the recovery of GDP from the second quarter of 2023 will allow the Spanish economy to face the energy shock in a better position than most countries in the euro zone", said Raymond Torres, director of Funcas situation, when presenting these forecasts.
It is true that the Spanish economy will perform better than that of the eurozone which, dragged down by the foreseeable poor results of the two big ones, Germany and Italy, will fall by 0.2% next year.
In the Spanish case, the weakening of the economy is due to three factors. The main one is the stagnation of private consumption. The rise in prices, well above that of wages, is clearly reducing purchasing power this year. A purchasing power that will also be reduced, although less, in 2023. In this way, the contribution of domestic demand to GDP would be only half a point. In addition, the external sector will also lose strength due to the cooling of the international economy.
The other two factors that are holding back economic growth are the rise in interest rates, which Funcas calculates will rise to 2.5% to stabilize at this level, and the deterioration of the international environment.
Regarding savings, Torres considers that the liquidity cushion that served families to compensate for the loss of purchasing power of their income has already been exhausted. The savings rate has already fallen to the average levels of recent years. It is true that there is still a significant savings cushion of what was not spent during the years of the pandemic, some 80,000 million euros, but this reserve is unevenly distributed, and those most likely to use it are precisely those who do not have it. In a climate of uncertainty such as the current one, it is foreseeable that this cushion will not be used and that only much later, when the clouds clear, can it become a driver of consumption.
In the current context of escalating prices, Funcas calculates average inflation this year of 9.1%, which would drop to 4.8% in 2023. In the coming year, generalized core inflation could be very close, which it would stand at 4.4%, which shows the extension of the rise in prices to all products. The increase began with energy, but its extension to the set of products has already been verified. Especially significant is the 14.4% increase in food prices in September, according to the latest data from the INE, which represents its highest rate since 1994.
