AIReF predicts that the GDP will resist at the end of the year waiting for Christmas consumption

The rating agency S&P Global Ratings was the last to join, on Monday afternoon, the cascade of upward revisions for the Spanish economy this year. The GDP will slow down in relation to 2022, when it advanced by 5.8% after completely leaving the coronavirus pandemic behind, however, growth will continue to be robust and will be around 2.4%. This estimate coincides with the one published last week by the OECD and just a few days before by the European Commission – the International Monetary Fund, somewhat more optimistic; places it at 2.5% – and which represents quadrupling the pace of progress planned for the Eurozone as a whole.

However, the fear is how intense the slowdown could be at the end of this year and the beginning of next, given that the main partners are unable to break out of stagnation or seem destined to close the year in recession, such as Germany. In that sense, and while waiting to see how private consumption behaves during Christmas, the calculations that the Tax Authority (AIReF) has released in the latest update of its real-time GDP forecast model (MIPred) suggest that Spain would manage to avoid a sudden stop.

The GDP would advance by 0.7% between October and December in relation to the previous quarter, when it was recorded 0.3% quarterly, according to the progress of the National Accounting released by the National Institute of Statistics. In relation to the same period of the previous year, the growth would be 2%. At the beginning of December, the model developed by the supervisory body already incorporates around 30% of the fourth quarter indicators.

The last one to be integrated into the estimate was Affiliations for the month of November, which confirmed the Resilience of the Market in the face of an increasingly more adverse situation due to the rise in rates and its increasingly deeper trace to the Economy, due to the cooling of the foreign sector or the shutdown of the industry, whose activity contracted in November for the eighth month.

A gradual cooling of activity.

Precisely in November the number of members was reduced by 12,000, weighed down by the hospitality industry and, despite this, the number of contributors remains at levels that had not been recorded before that month, with more than 20.8 million people contributing to the Security Social. However, in seasonally adjusted terms, memberships have increased by 10,350, at a much lower rate than the increase at the beginning of the year.

It is not the only indicator that confirms the gradual cooling of activity. As confirmed by the Ministry of Economy, Commerce and Business in its latest weekly situation note, although the public deficit improved in September and the balance of payments registered a high financing capacity in the same month, retail trade weakened consumer confidence in October, as well as mortgage signing in September, which sank another 29.6% after eight months of decline and the average interest rate reaching seven-year highs.

Worsening activity in Europe

The news coming from abroad points in a very clear direction. There are already six countries in the European Union in technical recession and, as market analysis company MacroYield warns, the number may increase in the fourth quarter, at the same time as the rise in unemployment (which has managed to remain in the zone until now). of minimums in the region) can prolong the economic stagnation of the region, with the obvious consequences for exports, which already fell 2.4% in year-on-year terms in the third quarter.

The weakening of the foreign sector was offset between July and September by the rise in household consumption, which with an increase of 1.4% has allowed Spain to resist the cold that has spread to other neighboring economies. It remains to be seen if this inertia is maintained heading into the final stretch of the year, when both household demand and investment faltered last year amid the export boom. The tables were changing as 2023 passed and the labor market resisted the onslaught of rising rates, inflation that has tightened somewhat again in the second part of the year, and an increasingly complex geopolitical context.