Future is Blue
Spain's resilience amidst geopolitical turmoil
Dec 6, 2023
Alice Faibishenko, a Senior Advisor at Funcas, discusses Spain's economic resilience amidst geopolitical challenges. She highlights the impact of the Gaza conflict on GDP growth and the crucial role of internal demand. The tourism sector is making a comeback, particularly with a surge in visitors from the Americas and China, despite regional struggles like in Catalonia. Faibishenko also examines economic vulnerabilities, including rising interest rates affecting the mortgage market and how households are adjusting their financial strategies.
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Quick takeaways
- Spain's GDP growth for 2023 is projected at 2.4%, reflecting strong internal demand despite looming external economic pressures for 2024.
- The tourism sector is recovering robustly, with increasing international arrivals from North and Latin America, although some regions face slower rebounds.
Deep dives
Spanish Economic Growth Outlook
Spain's GDP growth for 2023 is projected to be 2.4%, slightly up from previous forecasts, which indicates strong internal demand driven by public and private consumption. However, the forecast for 2024 indicates a slowdown to 1.5%, largely due to external economic pressures and the erosion of household savings accumulated during the COVID-19 pandemic. The anticipated impact of rising interest rates further complicates this outlook, as higher borrowing costs begin to affect consumer spending and investment. Despite these challenges, Spain continues to outperform other EU nations, with its growth contrasting sharply against the EU's projected figures of 0.6% for 2023 and 1.3% for 2024.
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