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The analyst consensus does not share the government’s economic message. Only the government is talking about an increase of 2% in 2024 and the rest (Bank of Spain, Funcas, IMF, OECD…) speak of fluctuations between 1.6% and 1.9%. But one consulting firm – Freemarket – believes things will get worse. With inflation at 3.2% we will only grow by 1.3%. Translated: another year of loss of purchasing power.
“The government’s 2% growth forecast for 2024 is not confirmed. Everything indicates that this variable is developing well below the development forecast by the executive branch and this is beginning to be reflected in the consensus of analysts and the majority of public and private, national and international organizations,” emphasizes the Freemarket report.
“And it seems obvious that if this hypothesis comes true, Other macroeconomic variables whose behavior is related to GDP growth need to be examined. For example, neither the deficit-debt binomial can be reduced permanently, let alone when the spending commitments made by the government with its partners materialize, nor can unemployment fall,” the study continues.
The majority of analysts and public and private, national and international organizations and institutions have revised down their GDP growth forecasts for 2024, below those of the government. AND This is normal given the trend of weakening in various economic indicators starting in the second quarter of the year and intensifying over the course of the 2024 financial year.
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Freemarket points out that “this needs to be pointed out at the outset.” enormous uncertainty both at home and abroad. This makes the implementation of the economic forecasts for 2024 much more difficult.” And domestically, “the original design of the government’s economic policy is being changed by the investiture agreements; abroad due to the complex geopolitical situation, the development of which is unpredictable.
And all this makes it difficult to accurately predict how the national economy will develop next year. “Nevertheless, the Freemarket vision is, ceteris paribus, more pessimistic than that of the Consensus, which underestimates the consequences of current monetary policy and also the expectations of families, companies and markets,” the report says.
Freemarket predicts “the government deficit will be 4.1% of GDP this year and fall to 3.8% in 2024.” smaller increase in the income-GDP binomial and maintaining the rate of increase in expenditure“.
What’s more: “The scenario would worsen depending on the level of implementation of the spending programs agreed at the inauguration. Unless there are unexpected shocks, Average annual inflation will be 3.2%.since all the effects of the monetary restriction applied by the ECB will occur in 2024.”
However, employment will grow by an annual average of 2.3% in 2023 The slowing trend will continue throughout 2024adds the consulting firm, “a year in which half as many jobs will be created as the previous year. This will lead to a slight decrease in the unemployment rate in 2024, which will be 12%.”
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