The Funcas Panel lowers its growth forecast to 2.2% this year and foresees a 13.9% unemployment

MADRID, 16 (EUROPE PRESS)

The Funcas Panel has lowered a tenth its forecast of GDP growth for 2019, up to 2.2%, in line with the Government's estimate, due to the lower contribution of national demand, while maintaining its forecast of an advance in the 1.9% in 2020. It also worsens its unemployment forecasts, predicting unemployment of 13.9% in 2019 and 12.8% in 2020.Specifically, ten of the 19 Funcas panelists have revised their downward estimate, as the composition of GDP growth varies with respect to the previous panel, while none has improved its forecast and increases pessimism in relation to the external context.

In this way, he estimates that the Spanish economy will grow one tenth less than estimated in July due to the lower contribution of national demand, since the foreign sector will contribute 0.1 percentage points compared to the zero contribution expected in July and the contribution of National demand is reduced 0.2 points, to 2.1.

Panelists have lowered the forecast for private and public consumption, although the downward revision of investment in fixed capital, especially in machinery and capital goods, has been cut, which has been cut by 1.2 percentage points, up to 3 ,3%. Regarding imports, its forecast is reduced by five tenths to 1.1%, compared to exports, for which it expects the same growth as in the July panel.

Looking ahead to 2020, experts maintain their forecast at 1.9%, but now expect the slowdown in the quarterly profile (0.5% to 0.4%) to begin in the second quarter of the year instead of the third , as estimated in the previous panel.

"The weakening of national demand, with a moderation of the growth rate of all its components, plus the worse performance of the foreign sector explain the economic slowdown next year," the panelists point out.

LOWER STOP REDUCTION

As a consequence of this less dynamism, Funcas points out that it is also observed in the labor market. Thus, it estimates that the average annual unemployment rate will be reduced to 13.9% in 2019 and 12.8% in 2020, forecasts higher than the previous ones (13.7% and 12.7%). However, the consensus forecast for employment growth remains at 2.2% and 1.6%, respectively.

As for inflation, which has fallen to values ​​around 0.4% in recent months, Funcas expects it to continue at similar rates for the remainder of the year, with a rebound in the months of November and December. The average annual inflation rate of 2019 is reduced by three tenths to 0.8%, while that corresponding to the underlying inflation is reduced by one tenth to 0.9%, exceeding for the first time since 2016 the general rate .

As for 2020, it expects an increase in the general and underlying inflation rate to 1.2%. The annual rates for December will be 1% and 1.2% this year and next, respectively. On the contrary, it maintains its forecasts regarding the deficit, and predicts a mismatch of 2.3% for 2019 and 1.9% for 2020, which represents, respectively, three and eight tenths above the Government's objectives.

INTERNATIONAL CONTEXT

Similarly, panelists are more pessimistic about the external context than in the previous assessment. There are 16 who believe that the environment is adverse in the EU and 14 outside Europe, compared to 14 and 11, respectively, in the previous Panel.

In addition, eight panelists believe that the situation will get worse in Europe, compared to none in the July assessment. No analyst anticipates an improvement in the next four months.