Economists join the IMF improvement and raise GDP to 2.2% in 2024

These forecasts exceed the 2% estimated by the Government in its last macroeconomic update sent to Brussels, in which they feel “very comfortable” as it is a “prudent” picture that will serve as a basis for the preparation of the 2025 Budgets, says the Minister of Economy, Carlos Body. Despite these good data, which are based on a strong forecast growth of 0.7% in the first quarter and good expectations for the second due to tourism, the CGE warns that the growth could be “temporary”, with a weak investment and a public deficit that will exceed the Government’s 3% forecasts.

In this sense, economists predict that the imbalance in public accounts will be 3.3%, one tenth less than their previous forecast due to tax revenue having grown by 7.5% in the first quarter, but well above that of the Government. Regarding debt, the Council estimates that it will stand at 106.6% at the end of the year, one point above the Executive’s forecast. “We should reflect on whether this is robust growth that rests on long-term policies or is fundamentally based on the exceptional boost in tourism and temporary factors such as notable population growth and temporary public funding stimuli,” said Valentín Pich. , president of the CGE during the presentation of the report.

Regarding employment, economists expect solid growth for the second quarter, although somewhat more moderate than in the first, given the strength that the tourism sector is showing, helped by domestic demand. They estimate that the unemployment rate will be reduced to 11.4%, which is one tenth less than the previous forecast, and two above the Government’s.

This good level of employment could create inflationary tensions, economists warned, especially if interest rates are cut, which is why they have increased the forecast for the average CPI by two tenths to 3.2%.