The main Spanish economists join the wave of upward revisions for the Spanish economy. The Funcas Panel, which reflects the consensus of analysts, revises upward the growth forecast for the Spanish economy in 2025 to 2.4%, one tenth more than expected in November. The projection for the current academic year presents a significant moderation from the 3.1% forecast for the end of 2024. The flat trend of exports and lower public consumption motivate this record.
The figure estimated by the country’s main study services is below that of the Bank of Spain and the Independent Authority for Fiscal Responsibility (AIReF) and above that of international organizations such as the European Commission and the OECD. The panelists expect an advance of 0.6% in the first quarter, followed by constant growth of 0.5% in each of the remaining three.
National demand will contribute 2.5 points, two tenths more than the previous forecast, while the foreign sector will subtract one tenth. Thus, the slowdown of the economy in relation to 2024 will be perceived in consumption, especially in the public, and in the foreign sector, due to a greater increase in imports than in exportsaccording to advanced projections this Monday.
Investment, for its part, will show more vigor, especially in machinery and capital goods, compared to the weak growth expected for 2024.
The consensus estimates that GDP grew by 3.1% last year, one tenth more than expected in the November Panel. National demand would have contributed 2.6 points, one tenth more than expected in the previous consensus, and the foreign sector, 0.5 points, one tenth less.
With inflation controlled, they look at employment
Regarding inflation, experts place the price level practically at the target pursued by the European Central Bank (ECB). The forecast for the average rate of the general index for 2025 rises one tenth to 2.2%, with an interannual rate for December that would remain at 2.1%, seven tenths less than in December 2024. Regarding the underlying , the forecast for the annual average also rises one tenth, to 2.3%. In this way, the price crisis would be practically resolved.
For their part, the panelists expect the average annual unemployment rate to be 11.1% in 2025, four tenths less than the 11.5% in 2024. After years of record employment growth, The labor market also shows signs of moderation: Employment will rise by 1.8%, four tenths less than in 2024.
Cleaning up public accounts appears to be a priority with the challenge of doing so without updated Budgets. The consensus of analysts has revised upwards one tenth of the public deficit forecasts for 2024 and 2025, up to 3.2% and 3% of GDPrespectively. Both figures are higher than those contemplated by the Government, although they would fit within the objectives agreed with Europe.
The ECB roadmap: 75 basis points this year
The Panel maintains its pessimistic view of the international environment, particularly in the EU. A significant differential in growth and interest rates persists between the eurozone and the US. Given the robustness of the American economy and the resulting inflation, it is likely that disinflation will take hold in Europe due to the current weakness.
However, the downward pressure on the euro – the panelists do not foresee a recovery in the short term – could force the ECB to operate more gradually than expected. All in all, the consensus points to an ECB rate cut of around 75 basis points until the end of the year.
This gradualness explains, according to analysts, why the one-year Euribor has risen since the beginning of December to around 2.6%, and would only decrease by around 35 basis points until the end of the year.
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