Santa Cruz de Tenerife (EFE).- The CEOE of Tenerife anticipates a slowdown in the growth of the Canary Islands economy in 2023, which would go from a forecast increase in GDP of 6.2% in 2022 to a range for this year that would be between 1.3% and 3.3% in 2023.
The report on the economic situation for the fourth quarter of 2022 from the Tenerife CEOE, which was presented this Friday by the president of the employers’ association, Pedro Alfonso, and by the director of the study, José Miguel González, emphasizes the drop in productivity by 8.47% in 2022 compared to 2019, the last year before the pandemic, and in a departure from GDP per capita with respect to the Spanish average.
The lower productivity occurs because in 2022 there are 990,800 employed people for a regional GDP of almost 45,800 million euros, compared to the 940,300 employed and the 47,200 million euros of GDP three years earlier.
The president of the employers’ association stressed that low productivity means that there is less production for each worker employed, which means a relative impoverishment of the Canary Islands in relation to the country as a whole.
In this way, the GDP per inhabitant of the Canary Islands, which at the beginning of the century was 99% of the country as a whole, rose to around 80% of the average throughout the first decade and is currently at 72%.
This scenario of relative impoverishment, to which is added a decrease in the fiscal differential with the peninsula, should lead to considering an Economic and Fiscal Regime “that synchronizes us” with the country, warned José Miguel González.
The CEOE report considers that the Canary Islands will not enter a technical recession and increases the GDP growth forecast for 2022 from the 5.9% that appeared in the report for the previous quarter to the 6.2% that is now expected. Despite everything, the CEOE anticipates “an intense slowdown” for 2023.
“We will continue with the positive inertia in the first quarter of the year”, but the slowdown will come, there will be less job creation and an increase in the unemployment rate”, according to José Miguel González.
The economic growth of the Canary Islands is being sustained by foreign demand, that is, tourist spending, which allows us to avoid the recession and which has not yet suffered from the adverse economic conditions that threaten the European economy, he explained.
But no system can avoid suffering in its economic activity sooner or later when interest rates rise at this rate, added González, and recalled that a year ago the Euribor was at 0% or negative and now at 3.8%.
The business spokespersons were especially critical of the deficient management that they attribute to the public administrations in the materialization of the European Next Generation funds, which, when properly applied, can add half a percentage point to the Canary Islands GDP.
The delay in the application of these funds in a context of rising interest rates supposes more financial cost for companies, which have to resort to higher credits to finance their part of the investment, two thirds of what the Union contributes Union, denounced Pedro Alfonso.
Another of the concerns of businessmen, especially for 2024, is the possibility that the European Union decides to restore controls over the public deficit and debt in the member states, which would deepen the economic slowdown.
This intensification of fiscal control can be especially detrimental when the increase in employment is being sustained in large part in the public sector, they warned. EFE