OECD improves growth forecast for Spain this year

by Lorraine Williamson
growth forecast for Spain

MADRID – The OECD released relatively positive figures for Spain on Friday. The organisation improves the growth forecast for Spain this year to 1.7%. It also lowers inflation to 4.2%. 

The growth is more than double the average for the Eurozone (0.8%) and well above the major European powers, such as Germany (0.3%), France (0.7%) or Italy (0.6% ). This is the conclusion of the OECD in the latest report published on Friday. In this, the agency increases the expected growth estimate for Spain this year by four-tenths compared to the last forecast, in November. However, for 2024, it maintains the same number as for 2023, with no variations from the last report. 

The Organisation for Economic Co-operation and Development, the body that brings together the most advanced economies, is also lowering the inflation rate it forecasts for Spain in 2023 from 4.8% to 4.2%. This parameter is also better than the average for the eurozone (6.2%) and countries such as Germany, Italy (in both cases 6.7%) or France (5.5%). Inflation would therefore fall from 8.3% in 2022, and continue to decline slightly in 2024 when it would reach 4% (0.8% less than the November forecast). 

“A Fragile Recovery” 

In its March report, titled “A Fragile Recovery,” the rich country club emphasises that global growth will remain subdued in 2023 and 2024, at 2.6% and 2.9% respectively. This is happening in the context of the tightening of general monetary policy. However, “positive signals” are seen, such as an “improvement in business and consumer confidence, the fall in food and energy prices and the full reopening of China”. For this, it raises four-tenths of the global growth forecast two-tenths for 2024 this year. 

Inflation will moderate with core inflation remaining high 

The international body expects inflation to “moderate gradually in 2023 and 2024”. However, in most countries, it will remain above the central bank’s targets until the second half of 2024. In G20 economies, it will fall from 8.1% in 2022 to 4.5% in 2024. Even if headline inflation falls, core inflation, which excludes energy products and food, will “remain high” globally. 

Although inflation in Spain will be below that of the main European countries in 2023, it will remain high in 2024, at 4%. The OECD has cut this forecast by eight-tenths, but it will nevertheless be above average for the Eurozone (3%), Germany (3.1%), France and Italy (both 2.5%). 

Argentina is by far the country with the worst inflation in 2023 and 2024 (85% and 75%), followed by Turkey (44.6% and 41.4%). Furthermore, the UK also has high numbers (6.7% in 2023, although it will be reduced to 2.8% the following year), Russia (6.4%) and Mexico (5.9%). 

Also read: Spain defies inflation with good economic data

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