Economic Forecast: A tribune from Manuel Alejandro Cardenete published in l’ABC de Sevilla
Manuel Alejandro Cardenete is Professor in Economics at Loyola University Andalusia and Visiting Research Professor at the Georgetown Environmental Justice Program. He recently published a tribune in the ABC de Sevilla newspaper on the economic outlook for the region of Seville, Spain, in the coming year. The results are better than expected, but the risks of recession are still present. Below is a translated and summarized version of the article:
Seville economy in 2023: Not so bad.
In the current context of inflation and economic slowdown, the Seville economy, like the Spanish and Andalusian economies, seems to be holding up better than expected. In the third quarter of 2022, all three geographical areas recorded growth in output and employment, and their respective year-on-year growth rates of the Consumer Price Index were below the 10% threshold. In this sense, we have revised the forecast for the Seville economy slightly upwards. Thus, Seville’s GDP would grow by 4.0% in 2022, and by 1.5% in 2023. The labour market will maintain its current traction, bringing the unemployment rate to around 16.5% in 2023, its lowest value since 2008. The Consumer Price Index, meanwhile, would still register a strong annual increase of 8.6% in the current year. In 2023, the increase would be 2.1%.
This growth responds to the positive performance of the indicators analysed, especially the recovery of tourism and the labour market, as well as the improvement in the province’s trade balance. The economy of Seville, like the economy of the autonomous community, has shown an upward trend in the first two quarters, although the estimate for Seville’s GDP in the third quarter would be lower than that obtained in the previous two quarters, at 3.4%. Considering that the past estimate has highlighted a decline in economic activity in the second half of the year, it is expected that the province’s GDP could close at 4% in 2022.
Looking ahead to next year, the GDP of Seville’s economy in 2023, despite being low, will register a higher value than that estimated for Spain, 5 tenths above (1.5% for Seville compared to 1% for Spain). This is due to the outstanding performance of indicators used as a measure of the province’s economic performance, such as exports and overnight stays, the latter being relevant to explain the behaviour of tourism.
Despite this upward revision, the scenario is not risk-free, and the risk of recession remains latent if the economic scenario becomes more adverse, as a result of a new upturn in commodity prices; an excessive tightening of financing conditions, making it difficult to refinance public debt; or a strong recession in the European economies. Let us hope that the forecasts are fulfilled or improved and that projects that are being confirmed, such as the Spanish Aerospace Agency, will further stimulate and diversify our economy.
Manuel Alejandro Cardenete, PhD
Professor University Loyola
Visiting Research Professor Georgetown