In this way, after the 0.5% start, in the coming quarters growth would move between 0.2 and 0.3%. It is the good performance of exports that allows this improvement in the forecast for growth this year, which offsets the downward revision of household consumption.
However, the scenario worsens in 2024. In the next year, GDP will only grow by 1.8%, that is, three tenths less than previously forecast. There is a majority agreement among the panelists who revise growth this year upwards in also reducing it for 2024. (8 of 11). In 2024, it will be private consumption and investment that will compensate for less dynamism in public consumption. Regarding the foreign sector, it will give worse results in 2024, because a slowdown in exports is combined with a rebound in imports.
On the other hand, the panelists of Funcas do not believe the rate of reduction of the public deficit that the Government has set. This year it would remain at 4.2%, while it would be reduced to 3.7% in 2024. In this way, the Executive’s objective of reducing the deficit in 2024 to the mythical 3% would not be met, the figure of reference in the fiscal rules of the European Union.
With regard to inflation, this year’s inflation has been revised downwards by two tenths, which would remain at 4%, while, on the contrary, the core has risen by three tenths, up to 5.8% . The INE placed inflation for April at 4.1%, but in a scenario of great volatility, with rises and falls that will be recorded over the coming months, especially due to the base effect, when compared with the same months of a year 2022, convulsed by the impact of the outbreak of the war in Ukraine.
Regarding the external environment, the Funca panel continues to view it unfavorably, both in Europe and outside it, and few changes are expected in the coming months. In the euro area, the tightening of monetary policy will continue. The panelists calculate that the one-year Euribor would be close to 4% at the end of 2023 to be below 3.5% at the end of 2024.
