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How much will Spain grow in 2022 with the war effect included?

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How much will Spain grow in 2022 with the war effect included?

The Spanish economy deflates every minute as a son who marks the rise in prices that is reflected in each and every one of the goods and services we pay for. The most immediate we have already seen. And the worst thing is that it occurs, due to the conflict between Ukraine and Russia, with a multiplying effect on what we were already suffering.

For example, we already paid for electricity at the price of gold. and the rise in oil prices as well, although it has become exponential after the Russian invasion of Ukrainian territory. We are already seeing the immediate effects, in homes with the increase in the electricity bill while we look for the best rate or look at the schedules to turn on the appliances every day.

Also with the increase in what we pay for heating and more every day, when we fill the fuel tank of our car: 29 euros more, it costs us if we fill it with gasoline and up to 35 euros if we do it with diesel.

Also in companies and for the self-employed, from those electro-intensive that even have to stop production because they cannot pay the bill or the transporters or fishermen who cannot go out to fish. And they believe, with the transport strike, derivatives such as shortages that in some cases are suffered, also due to the effect of accumulation.

Impact that also returns to us families, paying this to the raw materials, in the cost of the products, and in particular in the case of food. A whole circle that is already moving globally to the big figures.

The truth is that prices have risen, as we see in the graph until February, the latest data published in Spain at levels of 7.6% unknown in inflation in our country since 1986. Although if we check the progression, it has been evident vertically, increased by the war

Inflation in Spain in February and annual evolution

Inflation in Spain in the month of February and the annual evolution

The result is that, from the Government, the 7% forecast for this year is still not touched, despite the fact that from all the instances that have spoken, they indicate that growth will be much lower than that level and more than out of date. For example, from CaixaBank Research already advised him, only in a first phase, in its monthly report for March, that the effect on GDP in 2022 may exceed 1%, it what indicates Oriol Aspachs, director of Spanish Economy of the firm. That with oil at 105 dollars a barrel and gas at 120 euros mhw.

From the Funcas Panel, the most complete compendium of up to 19 studies and economic forecasting services, including yours to prepare an average GDP, It would reach in forecast 4.6% this year, one point less already including that impact of the war, at least with the economic damage in Spain recorded so far.

Forecasts of the Funcas Panel in March 2022

Forecasts of the Funcas Panel in March 2022

from them, the most optimistic is AFI international financial analysts who foresee a Gross Domestic Product in Spain of 6% compared to just 2.9% marked by Metyis, a consultancy of Dutch origin. They argue that the difference between the panelists is marked by the uncertainty of the conflict and its impact, which could differ markedly from the exposed forecasts. to say that the impact could be even greater on our economy. For inflation, its forecast already reaches 5.8% for the whole year.

Two more are the groups that have revised the forecasts of the Spanish economy in recent times: S&P which, despite the war, leaves GDP expectations at a 6.1% lift from the previous 7% and that it endorses, it says that the prospects for long-term growth are solid, which is why it maintains its credit rating on sovereign doubt at A and raises the outlook from negative to Stable.

The last to do so Fitch lowering its estimate to 5% from 6.3% Previously expected to indicate that the Russian conflict and energy prices have led to this sharp cut. In addition, the rating agenda highlights that Spain will not recover the average level of GDP prior to the crisis until the second quarter of 2023, something in which the Funcas Panel will also agree.

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