Jordi Sevilla, ‘senior advisor’ of Economic Context at LLYC and former Socialist Minister of Public Administration, forecasts that this first quarter of the year the Spanish Gross Domestic Product (GDP) will suffer a slight decrease of around 0.1%.
However, Seville expects the economy to pick up until the end of the year at around 1.5% average GDP growth. “It will be an economic year in which we will go from less to more,” he pointed out through an LLYC Economic Context video published this Thursday.
According to Sevilla, the bad employment data in January confirm the slowdown in which the Spanish economy is immersed and which was already noticeable in the last quarter of last year, where only exports and public consumption kept GDP slightly above 0 Specifically, GDP grew 5.5% in 2022 after advancing 0.2% in the fourth quarter, according to advance National Accounts data published by the National Statistics Institute (INE).
All this, in addition, in a context in which the income levels prior to the pandemic have not yet been reached and Spanish families have exhausted the excess savings accumulated during the Covid-19, which is why they are beginning to borrow to consume.
For its part, Seville has warned that inflation, despite being in clear decline throughout Europe, will maintain high levels this year. In Spain, the underlying also shows “worrying downward resistance.”
“With this, families will continue to lose purchasing power and the way out of the crisis is based, once again, on wages falling in real terms,” warned the former minister, after stressing that the social gap is widening and “too many people” it is falling behind despite the “hot cloths” applied by the Government, “more focused on mitigating the effects than on addressing their causes.”
In this context, Seville has emphasized that the European ‘Next Generation EU’ funds become the main driver for GDP growth, as well as the green and digital transition of the economy.