Spain's GDP Growth Projections Revised Amid Economic Resilience
The National Institute of Statistics (INE) has updated Spain's Gross Domestic Product (GDP) growth forecast for 2023, raising it by two-tenths to 2.7%. This adjustment follows a thorough statistical revision of National Accounts data, which has also seen economic growth estimates for 2022 increased by four-tenths to 6.2% and for 2021 adjusted upward by three-tenths to 6.7%. Consequently, the estimated annual GDP at current prices for Spain is now projected to reach €1,498,324 million in 2023, reflecting a 2.5% increase compared to the previous accounting base.
These revisions for the years 2021 through 2023 are the inaugural outcomes disseminated post the comprehensive Statistical Revision 2024 (RE2024) of national accounts series. INE maintains that accurate measurement of the economy is crucial, and therefore necessitates periodic updates to the statistical sources and estimation methods. This commitment to quality, coherence, and comparability of national accounts data aligns with the European Union's guidelines requiring countries to conduct systematic improvements every five years.
Following the last revision in 2019, all EU member states are currently progressing through the coordinated extraordinary revision process in 2024. The results of the national and regional accounts operations released by INE going forward will incorporate the effects of RE2024, ensuring that the data across the years 1995-2023 is homogeneous and comparable. For the years 2021, 2022, and 2023, these results will also reflect adjustments from the INE's regular annual revisions.
In related news, the Bank of Spain has also revised its projections, predicting a growth rate of 2.8% for 2024 while lowering the inflation forecast to 2.9%. The unemployment rate remains estimated at 11.5% for 2024, with expectations of declines to 11% in 2025 and 10.7% by 2026.
The Ministry of Economy, Trade and Business has responded positively to the recent economic growth revisions conducted by INE, emphasizing a more balanced and fiscally responsible Spanish economy. This growth is attributed to robust domestic demand, a strong labor market, increased investment contributions, and a sustained positive impact from the external sector. Furthermore, all components of demand are reported to have recovered to pre-pandemic levels, positioning Spain as a leader in economic growth among key eurozone countries.
In financial news, the European Central Bank's recent interest rate cut is set to influence mortgage prices in Spain, marking the second reduction of the year with a cut of 25 basis points. This shift underscores the evolving landscape of the Spanish economy, as it grapples with changing monetary policies and a path towards fiscal recovery.
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