According to the analysis of Funcas, the economic studies service linked to CECA, the GDP of the Valencian Community will grow this year by 1%, an increase less than the Spanish average but enough for it to recover the level prior to Covid-19, after an estimated increase of 5.5% in 2022.
According to Funcas, the automotive and tourism sectors could be the keys to growth in Valencia in 2023. The automotive sector still has room for growth after the normalization of supply chains, even though the context is not very favorable for consumption. Within the service sector, the most highly qualified activities will also be the most favored by the pull of European funds.
It should also get a boost from the tourism sector. In the labor market, the unemployment rate would drop to 12.7%, a level close to the national average. The inflation rate in 2022 was 8.5%, one tenth above the average, due to a slightly higher differential in food and services.
CEV situation report
Precisely the autonomous employers’ association CEV presented yesterday its report on the situation for the last quarter of last year. It includes that the Valencian economy slowed down in the last quarter of 2022, with “a flat evolution of 0.0% in the quarterly rate and an increase of 2.1% in the annual rate” below the national average. CEV’s current situation report is based on the latest data from the Independent Authority for Fiscal Responsibility (AIReF) and considers that stagnation will continue this quarter, although it expects a significant improvement starting in the second quarter.
According to the CEV report, the global economic slowdown, the high costs of energy and raw materials, the high levels of inflation and the rise in interest rates have accentuated the rate of slowdown in economic activity in the autonomous region. A scenario that is expected to be similar in this quarter according to their expectations.
The report predicts an advance in regional GDP to rates close to 1.5% for this year thanks to the gradual moderation of costs and prices, together with the progressive recovery of the European economy and the resilience of the labor market.
The forecast of the regional improvement, like the national one, for the second part of the year 2023 is forecast despite warning that, in the nearest future, the tightening of monetary policies and the still high inflation rates will weigh down the decisions of consumption and investment of private economic agents at a global level, to which is added a forecast of a slowdown in the euro zone of up to 0.90% for this year.
