Estimates that the unemployment rate will be 11.2% at the end of next year


The Funcas Panel has revised the GDP growth forecast for 2024 upwards by two tenths, to 2.1%, due to higher-than-expected growth in the last stretch of 2023 and the first quarter of this year, to which adds that the most recent indicators point to a “similar vigor” in the second quarter.

Of the 19 panelists, 13 have revised their forecasts upwards and none downwards, in line with the improvements in estimates made by the Bank of Spain, the European Commission or the IMF. The consensus maintains the expected growth for national demand, although with more prominence for investment and less for public consumption.

Specifically, the contribution of the foreign sector is revised upwards by two tenths, to 0.2%, due to the expected lower growth in imports and slightly higher growth in exports compared to the previous forecast.

For 2025, the GDP growth estimate remains unchanged at 2%. The greater growth in investment, both in construction and in machinery and capital goods, will compensate for the lower dynamism of consumption – especially public consumption – and, therefore, the contribution of national demand will remain at the same value as this. year (1.9), while the foreign sector will add one tenth.

In terms of prices, the panelists highlight that after slowing down at the beginning of the year, inflation has risen above 3%, partly due to the withdrawal of the main anti-inflation measures adopted after the energy ‘shock’, so they expect that The rate will continue to rise in the coming months and then decrease until ending 2024 at 3.1%.

For the year as a whole, average annual rates of 3.1% are expected in both the general and underlying rates, which is one tenth more for the former compared to the previous Panel. The forecasts for 2025 stand at 2.3% and 2.4% for the general and underlying, respectively. The interannual rate for December in 2025 would be slightly above 2%.

Regarding the labor market, the employment growth forecast for this year has been revised upwards compared to the previous Panel by two tenths, to 2.2%, but that for 2025 drops two tenths, to 1.6% . This will allow the unemployment rate to decrease to 11.2% in 2025, without changes compared to the previous consensus.

Likewise, the Panel foresees that the public deficit will be reduced to 3.4% in 2024 and 3.1% in 2025, which is two and one tenths less than in the March Panel and represent rates higher than those forecast by government.

Finally, the panelists understand that in a slightly better external context, and in the face of persistent inflation in countries like the US, interest rates will fall more slowly than expected. The Panel maintains the forecast of a first cut in June by the ECB, but subsequent adjustments would be milder, so that the deposit facility would still be above 2.5% at the end of 2025, 20 basis points more than the previous forecast. The Euribor would drop to 3.2% at the end of this year and to 2.8% at the end of 2025.