Unicaja Banco has published the third issue of the report ‘Previsiones Económicas de Cantabria’ (Economic Forecasts for Cantabria), prepared, as in previous editions, by Analistas Económicos de Andalucía.
This report made by Grupo Unicaja Banco’s research company is divided into three sections: 1) Economic environment; 2) Recent evolution of the Cantabria economy; and 3) Economic outlook for Cantabria 2023 and 2024.
The first section describes the international and national context. The second section analyses the situation of the Cantabria economy, with special focus on the evolution of the main indicators, according to the region’s productive structure. Finally, the third section includes forecasts on the evolution of the GDP and employment in the region for 2023 and 2024.
Global and national economic environment
Although the slowdown in global activity for 2023 compared to the previous year is confirmed and inflationary pressures persist, in recent months there has been an improvement in the outlook, which has led the main international economic organizations to revise their projections. Thus, the OECD forecasts that in 2023 the world economy will register growth of 2.6%. On the other hand, despite the moderation in energy prices, the dynamics followed by prices suggest that core inflation will remain high.
In the specific case of the Spanish economy, it grew more than expected in 2022 as a whole, at a rate of 5.5%, with greater intensity in the first part of the year, with a good performance of the labor market. The latest available data, relating to the first quarter of 2023, show a quarter-on-quarter GDP variation of 0.5%, with the foreign sector acting as a support. In year-on-year terms, GDP recorded an increase of 3.8%, with the good performance of exports, especially tourism services, and the contribution of the construction and services sectors, on the supply side, standing out.
The latest projections published by the Bank of Spain point to a GDP increase of 1.6% for 2023, while growth in 2024 is estimated at over 2%.
Recent evolution of Cantabria economy
According to the data from Cantabria Quarterly Regional Accounts, published by Instituto Cántabro de Estadística (ICANE), in the whole 2022, Cantabria economy recorded a growth of 4.0%, 1.6 percentage points (p.p.) lower than that of 2021. The expansion of the activity stood on the services and construction sectors mainly, which grew by over 4%.
In the first quarter of 2023, the GDP of Cantabria grew by 0.4% quarter-on-quarter (0.5% in Spain), according to AIReF (Independent Authority for Tax Responsibility) estimates. In year-on-year terms, growth was 2.3% (3.8% in Spain).
With regard to the labor market, according to the available information, employment continued to grow. Contribution to the Social Security scheme registered a year-on-year increase of 1.6% in April.
Economic Outlook for Cantabria 2023 and 2024
The forecasts made by the research company of Grupo Unicaja Banco, indicate that for 2023 as a whole, the regional GDP could grow by 0.9% (1.4% in Spain), recovering in the second half of the year the pre-pandemic level. Likewise, the number of employed persons (according to figures from the Labor Force Survey) is expected to increase by 0.2% on average for the year. Unemployment is expected to fall by 2.1%, bringing the unemployment rate to 9.2% on average for the year.
With regard to 2024, the first estimates of Analistas Económicos de Andalucía place the growth rate of the economy of Cantabria at 1.9%, and at 1.0% for the number of employed persons, with an unemployment rate of 8.6% on average for the year.
However, these forecasts are subject to high uncertainty and sources of risk, which may push them downward in terms of economic activity and upward with respect to inflation. Among the main risks are geopolitical tensions from the war in Ukraine, tighter-than-expected financial conditions and persistent upward price dynamics.