Spain | Navarre Economic Outlook 2023

Summary

BBVA Research forecasts a 1.9% growth in Navarre's GDP in 2023. Although the forward scenario deteriorates, the recovery may continue, with GDP expected to grow by 2.2% in 2024. 8,500 jobs could be created in the 2023-2024 biennium.

Key points

• Key points:
• The forecast for 2023 is reduced by 0.2 pp to 1.9%, due to a weaker than anticipated recovery of exports, industrial activity and investment. The forecast for Navarre's GDP growth in 2024 is corrected downwards (0.4pp) to 2.2%, due to the moderate deterioration of the global outlook in an environment of high uncertainty.
• The weakening is already observed in job creation and there is a downward bias on forecasts. Household consumption in Navarra seems to be slowing down, constrained by high interest rates, which will remain so for a prolonged period of time.
• Supply problems are perceived in certain sectors limiting growth: exports are reduced, industrial production of intermediate goods and transport equipment is restricted. Services show the depletion of tourism and volatility in public spending. Private investment shows a timid advance.
• It is assumed that the recovery can continue thanks to the strength of the balance sheet of Navarre's households and families, to the support that the acceleration in the implementation of European funds and their boost in the bidding of public works, and to the fact that the regional government has already announced that it will maintain an expansive fiscal policy also in 2024. In addition, the dynamism of the active population continues, having grown in 2021 and 2022 more than in Spain as a whole.

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