2023-07-25 21:28:20
Goldman Sachs has also reacted to the results of the 23J election in Spain. taking weight off what they can mean for the economyin fact. He has described them as “inconclusive”, since neither the right-wing bloc (PP-Vox) nor the left-wing (PSOE-Sumar) got enough seats to form the absolute majority necessary to invest a president. However, they believe that this factor will have “limited effects” on the country’s economic prospects and maintain their GDP growth forecast: they expect it to do so by 2.3% this year and 1.6% in 2024.
It is one of the conclusions that the North American bank maintains in its report ‘European Views: Dodging Recession’, published this Tuesday, a day after the banks suffered falls in the Spanish stock market, which however moderated throughout the session. The experts attributed them, among others, to uncertainty due to electoral results that open the door The possibility of reissuing a left-wing government that perpetuates the special tax on banks.
According to the perspectives of the entity, the Spanish economy will remain strong “despite the variety of views regarding fiscal policy.” Basically because “the majority parties agree with the importance of implementing the commitments with the recovery funds”, which the bank expects will continue to grow. Goldman Sachs understands that the growth of the Spanish economy continues to rise due to its “limited exposure” to the manufacturing sector and its “continuous gains” in terms of a service sector.
European perspectives
The bank recalls in its report that the euro zone economy has slowed down, with a “notable and surprising drop” in the Purchasing Managers Composite Index (PMI), which fell 48.9 points in July. Growth prospects are falling due to an affected manufacturing sector and a service sector that is not having a good time either. So, the entity displays “caution” compared to growth in the second half and reduces the estimate for the third quarter to 0.1% and its forecast for the fourth quarter to 0.2% (from 0.3%). Growth of 0.4% is expected for the year as a whole, “slightly below” what was forecast.
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However, he is more positive in other aspects and points out that “the fall in general inflation, the growth in wages and the increase in employment” will improve real household consumption. This “must absorb the extra cost of mortgage rates“, on the rise. Goldman Sachs also affirms that inflation is falling throughout the euro zone “faster than expected” and that Spanish inflation, “which tends to lead that of the euro area”, points to pronounced falls in the future. It also foresees a fall in the prices of non-energy industrial goods, although not in the services sector.
Ultimately, he asks the officials of the European Central Bank (ECB) – which is expected to raise the rates again by 25 points – to maintain a “constructive view” of the economic outlook, “given the current resilience of the labor market”. He also asks the president, Christine Lagardethat the necessary measures be taken to return to inflation below 2% as soon as possible, and they do not rule out a new rise in points in September.
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