The experts and executives of the PwC economic and business consensus expect the Spanish economy to grow by 1.4% in 2023, three tenths more than in their previous forecasts, mainly due to the “good performance of exports” and the maintenance of consumption of the families. This is one of the conclusions of the report, corresponding to the first quarter of the year and prepared by PwC based on the opinion of a panel of 450 businessmen and executives, which adds that the experts “are moderately optimistic” about the economic evolution of this year, once “the risk of recession” has been overcome.
Regarding the report for the fourth quarter of 2022, the panelists who think that the Spanish economy will perform worse in the next quarter drop to 16.8% and those who believe that within a year it will be better increase 20 points (to 48%) , while 23% “expect more difficulties”. The data seems to indicate that the uncertainty generated by the war in Ukraine and the fact that it has spent a winter without supply problems are issues that “weigh less and less on the economic outlook”, and by 2024 those surveyed estimate that the economy will grow 2.1%.
Behind this perception is the situation of the companies: 8% rate it as bad and 92% as good or regular, a solidity that is based on the good evolution of exports. 90% of those surveyed consider that in the next six months they will increase or remain stable and that same percentage highlights the competitiveness of the companies, while with regard to job creation, the position is divided 50% among those who think that it will to continue the same or better and those who consider that it will decrease.
Inflation will fall to 3.8% by the end of the year
Inflation, according to experts, will be another “key” factor in the coming months and when asked about their forecast, they place it at 4.1% in June and 3.8% at the end of the year. Regarding its pricing policy, 60% of those surveyed indicate that they expect to increase them compared to 40% who say that they will maintain them, and the reason most of them indicate -in 67%- is the increase in costs such as energy and transport.
Inflation, as well as the drop in the growth rate of the economy, affects families, whose situation is regular for the majority and will be worse in the next quarter for 34% (compared to 70% in the previous report). Thus, it is expected that consumption will continue to hold up, according to 44.7% of those surveyed, although 78% expect a drop in demand for housing. One of the causes is the rise in interest rates. 82% anticipate that they will be between 3% and 3.75% in June and those who predict a rise at the end of the year to 4.25% increase considerably. PwC clarifies on this point that the responses of the panelists are they occurred before the latest developments in the banking sector in the US and Europe unleashed.
The panelists show “a general concern about the situation of the accounts and the increase in public spending” in this economic and business consensus of PwC, which focuses in this edition on the measures necessary to combat the structural deficit of the economy.
Regarding pensions, 69% of those surveyed consider that the almost 20,000 million that the increase in spending in this item represents “puts the sustainability of public finances at risk” and adds that discretionary deviations from public spending are one of the risks to meet the objectives of the 2023 Budget Plan. 63.2% of them assure that the state of public finances has not been sufficiently corrected after the 2008 crisis and that the pandemic has caused “an excessive imbalance”, while that 76% believe that after the anti-crisis package approved at the end of 2022 there is a high probability that expenses will exceed the originally budgeted figures. 55% consider that there is a high risk of failing to meet the deficit targets for 2023 and those planned for 2025 in the convergence plans, in addition to the fact that almost 78% believe that the budgets for 2023 are clearly conditioned by the electoral year . 62% of the experts regret that no progress has been made in this legislature on the tax reform provided for in the White Paper and 65.5% believe that the increase in collection is due to the nominal increase in the economy, but not to fund restructuring that establishes public spending in the medium term.
There is also a majority (67%) who demand a modification of the Spanish tax regulations so that the personal income tax rate is automatically updated with inflation. In this sense, the panelists call for firm action in the fight against fraud, since almost 90% believe that there is room to increase income in this way.
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