Unicaja Banco has published the fourth issue of the report ‘Previsiones Económicas de Asturias’ (Economic Forecasts for Asturias), 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 Asturias economy; and 3) Economic outlook for Asturias 2023 and 2024.
The first section describes the international and national context. The second section analyses the situation of the Asturias 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
According to the latest report published by the OECD, the world economy is expected to grow by 3.0% in 2023 and by 2.7% in 2024, in a context of continuing high interest rates, given the persistence of higher-than-expected inflation levels. These forecasts are accompanied by significant downside risks, mainly stemming from a greater-than-expected slowdown in China, the materialization of disruptions in the energy and food markets, and the maintenance of high levels of public debt.
Regarding the Spanish economy, the Quarterly National Accounts (QNA) data, from the INE, for the second quarter of 2023 (after the revision of the Annual Accounts), show that the GDP grew by 0.5%, 0.1 percentage points (pp) below the previous quarter, registering a variation of 2.2% in year-on-year terms. The increase in production in this quarter was due to the contribution of domestic demand, especially that of household consumption and investment in construction.
The latest projections published by the Bank of Spain point to a GDP growth of 2.3% for 2023. Thus, the Spanish economy will be the fastest growing among the main economies of the European Union. In 2024, growth will stand at 1.8%, supported by private consumption and gross fixed capital formation.
Recent evolution of Asturias economy
According to AIReF (Independent Authority for Fiscal Responsibility) estimates, the Asturias GDP would have grown by 0.1% in the second quarter of 2023, 0.5 pp lower than in the first quarter. In year-on-year terms, a 0.8% growth is estimated.
On the demand side, the pace of growth in private consumption is reported to have slowed. Retail sales have registered a better performance up to July than in the same period of 2022. On the other hand, the industrial production of capital goods would point to a lower dynamism of investment in machinery and equipment, while residential investment would have shown a better performance than in the national set, as reflected in the sales and purchases.
The value of exports of goods stood at 3,321.6 million euros in the first half of 2023, which represents an increase of 5.3% compared to the same period of the previous year. This increase was largely due to the growth in coal exports. In contrast, sales of semi-manufactured goods (the region's main exports) fell by just over 20%.
On the supply side, GDP growth in the first half of the year would have been supported mainly by construction and market services.
With regard to the labour market, market services and construction drove job creation in the second quarter of the year, after four consecutive quarters of year-on-year declines. Likewise, the pace of Social Security enrollment accelerated slightly throughout the year.
According to the Labour Force Survey, in the second quarter of 2023 the number of employed persons stood at 399,400, an increase of 17,400 compared to the first quarter, 92% of which was concentrated in the services sector. In year-on-year terms, employment increased by 4.5%, with the increase in commerce, transport and hotels and restaurants standing out. The number of unemployed decreased by 4.8%, bringing the unemployment rate to 10.5% (11.6% in Spain), 0.9 pp lower than a year earlier.
Economic Outlook for Asturias 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 1.5%. With regard to 2024, the growth rate could remain at 1.5%, in a context of high inflation, high interest rates, weakening international activity and growing geopolitical tensions.
Likewise, it is estimated that, on average in 2023, the number of employed persons (according to the Labour Force Survey figures) will grow by 1.3%, with job creation being sustained by construction and services. The number of unemployed could fall by 1.5%, which would bring the unemployment rate to 12.3% on average for the year, 0.3 pp lower than in 2022. For 2024, employment is expected to grow by 1.2%, with an estimated unemployment rate of 11.4%.
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