BBVA has made its usual analysis of the Valencian economy and points to the deterioration of growth prospects. His revision of the GDP of the Valencian Community is produced downwards because, as Rafael Domenech, head of Economic Analysis at BBVA Research, explained this afternoon, "the Valencian economy is a very open economy and very sensitive to the global economy."
According to their estimates, the Valencian economy could register growth of 2.1% by 2023, three tenths below the national average, which will be 2.4%. By 2024, it estimates that GDP will slow down to 1.9%, one tenth above what is expected for Spain as a whole. "The message we give is that of moderately optimistic growth, since it can continue at rates similar to those of this year (...) We have very healthy balance sheets, both in companies and in families," explained Domenech.
In their analysis they consider the industrial production index, which is also reduced. In this regard, Domenech has pointed out that "industrial activity could have already hit rock bottom", although when asked by the media he explained that there are structural problems to which it will be difficult to provide an immediate response. Domenech was referring, on the one hand, to current factors, such as the bottlenecks that have been generated, for example, in the automotive industry due to difficulties in the supply of processors and chips.
"These are transitory effects, but there are others to take into account. We are in a world in which there has to be a massive deployment of renewable sources for the industrial sector, since let us remember that many industries have suffered a shock due to the energy cost," has pointed out. Thus, she added that "we are moderately optimistic that the transitory factors could disappear, but others will take longer," she noted.
From its analysis it is derived that in the Valencian Community the industry linked to consumer and intermediate goods is not able to recover, but neither is that of automobiles and components despite the fact that the progressive disappearance of bottlenecks is already giving oxygen to the recovery. industrial from other territories.
"There are good bases to think that if the risks do not materialize, there are good bases for the recovery to continue, because expectations regarding the price of gas improve," said Domenech, who recognizes that there is "a lot of volatility" due to the recent conflict between Israel and Hamas.
In this regard, he said that "neither we nor anyone else is capable of assigning a probability of escalation or closure of the Strait of Hormuz, but indicators of geopolitical uncertainty can be analyzed in real time and their effects on markets and prices." has explained about it.
Regarding how the industry is recovering, the entity also observes signs in employment, as it points out that the slowdown has taken place "in all the provinces of the Valencian Community", although it is more intense in Castellón, "where the weight of the industry is greater and it is more exposed; also and in Alicante as a consequence of the European slowdown that has also affected tourism," stated the head of Economic Analysis.
The report adds that Valencian exports of goods are still 11% below the pre-pandemic level accumulated until July. And although during the first half of 2023 there was a "strong recovery in food", activity in the automobile sector has not yet recovered, and in July exports this weakness was generalized to the rest of the sales of goods abroad. .
