MAPFRE Economics forecasts Spanish economic growth of 1.4% in 2024 and 1.8% in 2025.
The Spanish economy has shown greater resilience than other neighboring countries, but the effects of monetary tightening are already beginning to be felt. Thus, MAPFRE Economics, MAPFRE Research Service, warns of weakening national growth, which will increase from 2.5% in 2023 to 1.4% in 2024 before rising to register 1.8% growth the following year. This is stated in the Economic and Sectoral Panorama 2024, published by the Research Service and edited by Fundación MAPFRE.
Consumption and investment will slow until financial conditions become more favorable again. Inflation too this year will slow down and amount to 2.4%.Regarding risks to the Spanish economy, research service MAPFRE notes tightening monetary policy, a slowdown in construction and a decline in mortgage lending and expectations of industrial investment, tourism and export growth, among others.
As for the global economy, global economic growth is expected to slow slightly in 2024 to 2.3%, followed by a moderate recovery to 2.6% in 2025. Despite this improvement, MAPFRE Economics explains that it will continue below both potential and average levels of recent decades. Inflation will continue to decline and will likely end 2024 at 4.4% before falling further to 3.3% next year. This slowdown in price growth, coupled with weakening economic growth, creates a less stagflationary picture than in previous editions of this report, as well as a more balanced balance of risks controlled by central banks.
The US contribution to global growth will decline this year, although advanced economies will still play a larger role than emerging economies. As such, the power sector is expected to grow 1.1% this year and 1.5% in 2025, not ruling out more inflation progress due to slower demand and less impact from supply issues. The Eurozone will continue to stagnate, with economic activity expected to decline. remains imperfect and lacks clear driving forces growth, although a gradual recovery could begin at the end of the year or early 2025. MAPFRE Economics forecasts GDP growth of 0.6% in 2024 and 1.6% the following year.
Asia is experiencing less comfortable inflation dynamics, although they will continue to do so. compatible with “acceptable” growth rates and will remain the main shock absorber to global growth, with a forecast of 4.5% this year and 4.1% next year. As for Latin America, it will be affected by weaker external demand, which will affect growth this year, which is expected to be 1.4% and 2.2% next year.
Impact on the insurance sector
The insurance sector will continue to be impacted by fiscal tightening and MAPFRE Economics forecasts non-life underwriting volumes to decline due to the cyclical downturn, with average growth of 5% between 2024 and 2025 globally compared to 7%. 0.1% expected by 2023. The results of the Life Savings business will, in turn, be dependent on economic activity and the interest rate environment, and the industry is expected to benefit from rates high enough to generate new business, despite the expected decline. . Thus, for the Life business as a whole, growth will be about 7%.
In general, the MAPFRE Research Service provides increasing industry profitability, which has worsened in recent years due to rising inflation, upward revisions in insurance premiums and slowing growth in insurers’ costs. Financial returns from insurers’ investment portfolios will help improve profitability.
You can read the full report here