Seville, (EFE).- Domestic consumption and tourism have driven a differential growth of the Andalusian economy of two tenths more than the Spanish one in the first quarter of 2023. This has led the Economic Observatory of Andalusia (OEA) to review the rise in GDP for this year to 1.6%. Although it will be four tenths lower than that of Spain.
The president of the OEA, Francisco Ferraro, and the professor of the Pablo de Olavide University Manuel Alejandro Hidalgo have presented the forecasts for the Andalusian economy today at the Fundación Cámara.
And they have highlighted that it performed better than expected between January and March. And predictably it will continue in the second quarter. Although in the second semester its growth will slow down due to the impact that the rise in interest rates will have on income. That entails the increase in the cost of mortgages and credits.
The impact of the drought
The drought will also impact the evolution of the Andalusian economy, more strongly than in the rest of Spain. Given the weight of the agri-food sector in the productive structure and agriculture. That supposes the six percent of the GIP. And, although the OEA has not quantified it, other organizations place it at a lower growth of between half and one point of GDP, explained Professor Hidalgo.
The Andalusian economic dynamism in this first part of the year is based on domestic consumption. Which has started to grow strongly this year, especially the consumption of durable goods. While that destined for food falls, and also in foreign tourism, which has grown by 20% in visitors. And 9% in spending.
In turn, the rise in consumption is explained by the downward trend in inflation. And for the improvement in the income of Andalusians driven by the recovery of the labor market. As well as the improvement in consumer confidence and expectations.
In fact, growth is very intense in the commerce, hospitality and transport sectors. And although the rest are also advancing, they do so at a slower pace, while public consumption has fallen, Hidalgo pointed out.
interest rate uncertainty
However, doubts and uncertainties loom over this positive scenario because the rise in interest rates by the European Central Bank has not ended, which will foreseeably raise them again and reach its ceiling in the summer, and the effects of this measure They are somewhat behind schedule and, therefore, they will be noticeable in the second half and also partly due to the increase in prices, although they will continue to moderate, as well as due to the drought if it persists throughout the year.
The “intensive” deployment of European Next Generation funds plays in favor of economic dynamism, added Francisco Ferraro, who has valued the wage agreement between unions and employers in Spain because “it helps stability and anchor inflation2.
He recalled that Andalusia has already recovered the level of GDP prior to the coronavirus pandemic, but not the per capita income per inhabitant, a level that could reach in 2024, with a forecast of economic growth of 2.1% for the next year. EFE
The entry The Observatory reviews upward, to 1.6%, the growth of the Andalusian economy in 2023 was first published in EFE Noticias.