2024-07-04 17:07:14
The Savings Bank Foundation (FUNCAS) it has revised Spain’s GDP growth forecast for 2024 and 2025, reducing its forecast for the current year. According to the latest estimates, Spain will be one of the main drivers of growth in the European Union in 2024.
The upward revision of the forecast for 2024 puts Spain’s GDP growth at 2.5%, which represents an increase of 0.25% compared to the previous FUNCAS estimate. This increase is mainly due to the gradual recovery of economic activity following the impact of the health crisis caused by the COVID-19 pandemic.
In addition, FUNCAS has also revised its growth forecast for 2025, albeit to a lesser extent. Spain’s GDP is estimated to grow by 1.8% that year, which represents a 0.2% decrease compared to the previous estimate. This downward revision is due to the remaining uncertainty regarding the global economic outlook and the possible slowdown in growth in the world’s main economies.
What factors will drive the growth of Spain and the European Union in 2024? According to FUNCAS, the recovery of domestic demand and investment will be key to boosting economic growth. As the pandemic is brought under control and vaccination continues, consumption and investment are expected to begin to recover, boosting economic activity.
Another important factor is the arrival of European funds intended for economic recovery. The European Union has approved a recovery plan that includes 140 billion euros in direct aid to Spain. This money will be used to promote investment projects in infrastructure, renewable energy, digitization and other important sectors for the Spanish economy.
Despite these optimistic forecasts, however, FUNCAS warns that the economic recovery will not be uniform in all autonomous communities. Differences in growth and employment between regions could be stronger, which could generate inequalities and imbalances between them.
On the other hand, GDP growth forecast Spanish for the current year has decreased from 6.5% to 6.3%. This downward revision is mainly due to the negative evolution of the tourism sector in the first half of the year, although the situation is expected to improve in the second half of 2021.
Regarding the evolution of the labor market, FUNCAS estimates that the unemployment rate will decrease to 15.8% in 2024 and 15.2% in 2025, which represents a slight improvement compared to the previous forecast. However, the unemployment rate will remain above the European Union average, which is expected to be 14% by 2024.
In this sense, it is important to mention that the economic recovery will not automatically lead to a recovery in employment. It is estimated that the Spanish labor market will take time to fully recover, as many of the jobs that were destroyed during the pandemic may not exist again or may require a change in the workforce.
On the other hand, the evolution of inflation will play an important role in the Spanish and European economy in the coming years. According to FUNCAS, inflation is expected to reach 1.6% in 2024 and 1.5% in 2025, staying below the European Central Bank’s 2% target.
In summary, the latest FUNCAS forecasts show that there will be a sustained recovery for the Spanish and European economy in the coming years. However, risks and challenges remain that must be addressed to ensure a balanced and sustainable recovery worldwide. The appropriate management of European funds and strategic planning in collaboration with the various autonomous communities will be essential to achieve economic growth and stability in Spain and the European Union as a whole.
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