Spain’s GDP growth is expected to accelerate slightly in the second quarter of this year. This is thanks to the momentum of non-resident consumption, especially in areas such as spending on restaurants, transportation, leisure, entertainment, clothing and footwear, which are benefiting from enhanced health security and normalization of socialization. . Furthermore, exports of manufactured goods continue to show some strength despite obstacles associated with rising production costs and disruptions in production chains.
but, BBVA Research believes that figures from the past few months indicate a slowing recovery, meaning that activity could stall by the third quarter of 2022. This situation may continue for the next several quarters or even record a gradual decline in GDP trends as a result of increased uncertainty, rising inflation expectations and rising interest rates.
On the one hand, the end of the tourist season would explain the decline in the evolution of employment. Meanwhile, with rising costs expected to remain permanent, companies are starting to pass some of their costs onto prices and workers are starting to negotiate higher salaries. as a result, Inflation will be higher than expected in the coming months and will take longer to normalize. This means the ECB has brought forward its interest rate hikes and the market expects them to reach a higher point than expected a few months ago. BBVA Research believes monetary policy rates have risen 125 basis points (bps) since June and could rise another 125 basis points (bps) by the end of the year, heading towards a neutral or slightly restrictive direction. . this is, Economists at BBVA Research estimate the burden on consumer spending growth will be about 2.2 percentage points in 2023.