The Government raises its GDP forecast for 2023 to 2.4% but cuts that for 2024 by four tenths, to 2%

MADRID, 16 Oct.

The Government raises its GDP forecast for 2023 to 2.4% but cuts that for 2024 by four tenths, to 2%


The acting Government has raised its growth forecast for this year's Gross Domestic Product (GDP) to 2.4%, three tenths above the previous projection, while it has cut its estimate for the advance of the economy by four tenths. economy in 2024, up to 2%.

The Government has sent the 2024 Budget Plan to the European Commission, which has included a deficit forecast of around 3% for next year and a public debt ratio below 110% of GDP already for 2023 (108 ,1%).

Like every mid-October, the Government has sent this report to the Commission in compliance with community standards. The text destined for Brussels includes both the forecasts of the macroeconomic situation, as well as the evolution of the country's public finances and the draft General State Budgets (PGE).

The Executive explains that in 2023 the effect of a more contractionary monetary policy than expected will be offset by the positive surprise in exports of non-tourist services.

Estimates suggest that the GDP in Spain in the second half of the year would be experiencing a slowdown due to monetary contraction, mainly through the slowdown in private consumption, as indicated by the most recent data due to the direct impact of the tightening of monetary conditions. On the other hand, the Spanish economy would suffer the direct impact of the contractionary monetary policy through foreign demand.

For its part, the lower growth projected for the euro zone explains the downward revision in GDP growth for 2024, while consumption and investment accelerate their growth. Despite the more persistent than expected tightening of monetary conditions, the Spanish economy will maintain its dynamism, defends the Government.

In 2024, GDP growth will rely on domestic demand, as well as the moderation of external demand due to the weakening of trading partners. The Executive points out that the expected acceleration of consumption and investment in 2024 is supported by the deployment of the Plan, the dynamism of the labor market and the financial solvency of households and companies, whose debt has reached minimum levels since 2002 according to the financial accounts of the second quarter.