The Government of Catalonia published Catalonia’s macroeconomic forecast today for the 2023-2024 two-year period, which foresees a GDP growth of 2.4% in 2023 and 1.8% in 2024. The new estimates reflect a moderation in growth, in a context of high uncertainty due to the weak global environment (especially in the euro area), the war in Ukraine, persistent underlying inflation and the effects of tighter financial conditions. Despite the slowdown, the Catalan economy is growing above the eurozone average (which has growth rates closer to 1%) and will evolve in line with the growth of the Spanish economy.
The GDP forecast for 2023 increases by seven tenths of a percentage point, thanks to a better first half of 2023 than expected six months ago (especially external demand) and improved expectations regarding the Spanish economy. For 2024, the forecast has been adjusted downwards by 4 tenths of a percentage point due to the worsening global outlook (especially for the eurozone’s trading partners).
The forecast for 2023
In 2023, Catalan GDP is expected to grow by 2.4% (compared to 5.5% in 2022), with a positive contribution from both domestic demand (1.3 points) and external demand (1.1 points). Household consumption decreases (to 1.0%), but remains buoyant thanks to job stability and wage growth, while the increase in public consumption would be moderate at 1.9%. The growth of total exports of goods and services has been adjusted to 8.0%, conditioned by the increasingly limited scope for recovery in foreign tourism and a weaker environment. However, exports of goods have been dynamic so far this year and foreign tourism is expected to make a significant contribution to GDP. Total imports would grow by 6.1%.
In terms of the labour market, job creation is expected to plateau after the strong recovery in 2021 and 2022, in a context of a highly dynamic active population. Forecasts for 2023 point to the creation of 55,700 jobs. This dynamic, together with the marked increase in the active population, will lead to a decline in the unemployment rate to 9.3%, the lowest level since 2008.
The forecast for 2024
In 2024, GDP growth will continue to be a moderate 1.8%, a pace that will allow this macroeconomic indicator to surpass the 300 billion euro mark for the first time. Domestic demand will gain prominence, due to improved confidence, the gradual recovery of real incomes and the deployment of the NGEU funds. The growth rate of household consumption is forecast to grow to 1.9% and investment to 3.0%. Public consumption, on the other hand, is expected to show moderate growth of 1.6% in a year in which European fiscal rules will be reactivated. The contribution of external demand is expected to be lower due to the exhaustion of the margin for recovery of foreign tourism during 2023. However, external demand will remain balanced. Imports (up 4.1%) are set to outpace exports (3.6%), driven by investment.
After a notable and continuous improvement in labour market indicators since early 2021, the Catalan labour market is getting closer to its potential. Thus, in 2024, full-time equivalent employment is expected to increase by 1.1%, which would translate into the creation of almost 39,000 jobs. This would bring the unemployment rate down slightly to 9.2%.
The document Macroeconomic Forecasts. Macroeconomic scenario for Catalonia is available, on Catalan, on the website.