He estimates that the deficit would drop to 3.2% in 2024 and 3% in 2025, but warns that the debt will be very difficult to reduce below 105%

The Savings Bank Foundation (Funcas) estimates a growth in the Spanish Gross Domestic Product (GDP) of 1.8% this year 2024, three tenths more than its previous forecasts, and projects a boost to the economy in 2025 of 2 %.

The general director of Funcas, Carlos OcaƱa, acknowledged at a press conference to present the Foundation’s spring forecasts that, despite this relatively comfortable scenario in the short term, one of the most worrying points is the weak evolution of the investment.

In fact, he has warned that if this investment deficit is not corrected, growth in the medium and long term will be affected and it will be much more complicated to address the fiscal balance required by Brussels.

Furthermore, the director of International Economic and Economic Affairs at Funcas, Raymond Torres, has indicated that there are two factors that lead them to consider that there could be a certain slowdown this year compared to last year.

The most powerful, according to Torres, is fiscal policy. “In a situation of budget extension, many of the spending items are frozen,” he explained. Another factor is the reversal of the measures of the anti-inflation package, which will reduce disposable income for households and will occasionally increase consumer prices.


Despite all this, the Foundation points out that the available data relating to the first quarter of this year continue to show the resilience of the Spanish economy. Thus, they estimate a quarter-on-quarter GDP growth of 0.6% in the first quarter, that is, of the same magnitude as the advance in the fourth quarter of 2023.

National demand will contribute 1.8 points to the GDP in 2024 as a whole, with a contribution from public consumption of just four tenths, half that of 2023. The contribution from the foreign sector will be zero, compared to the eight tenths added by the last year.

The boost, therefore, will come from private consumption and the slight expected rebound in investment, which explains the upward revision of the growth forecast (three tenths more than in January).

The Foundation points out that the budget extension makes it necessary to expedite recourse to European funds, which are not subject to the rules of freezing spending, so that the boost to the ‘Next Generation’ program could be somewhat greater than in 2023.

Furthermore, experts point out that private consumption will be sustained thanks to the income provided by job creation and the disbursement of a part of the savings accumulated last year as a result of disinflation. Funcas expects that part of this excess liquidity will disappear this year, so the savings rate would drop to 10.3%, still above the historical average.


Regarding inflation, Funcas estimates that the indicator would go from 3.5% on an annual average last year in CPI terms to 3.2% this year, mainly due to VAT adjustments. For next year, the Foundation believes that Spain will get closer to the ECB’s objective, with a rate of around 2.3%.

The job creation cycle will continue and will allow the unemployment rate to drop to 11.2% at the end of 2024, a level still very high in European comparison. In 2025 the unemployment rate would fall to 10.3% at the end of the year.

On the fiscal level, Funcas estimates suggest that the deficit would fall to 3.2% in 2024 and to 3% next year, but it has warned that the public debt will be very difficult to reduce below 105%. at the end of the forecast horizon period.

“There we still have a very important challenge, which is the challenge of reducing public debt. It is not a very short-term challenge, but in the medium term it is a challenge for us,” Torres reiterated.

For countries like Spain with debt greater than 90%, European regulations require a decrease in the public debt-to-GDP ratio of at least one percentage point each year.

Another condition is that the deficit decreases at least 0.25% points each year until it reaches 1.5% of GDP. With an increased investment effort, the double standard of deficit and debt would be met with gradual adjustments. However, in a scenario of persistence of the current weakness of investment, the debt criterion would require an abrupt fiscal adjustment starting in 2026.