Expected rate cut: respite for Alicante households and hope for exports

ALICANTE. Throughout 2023, household consumption continued to be supported by strong employment performance. In addition, rising wages and curbing inflation have improved household purchasing power, mitigating the impact of rising interest rates on purchasing power, especially for the most indebted households. It is expected that in the second half of 2024 the levels before June 2022, when interest rates even turned negative, will not be returned, an expected rate cut that will begin to reduce the financial burden of households and companies, which, together with a decrease in the debt ratio what has happened in recent years will continue to improve its financial position. This is part of the analysis Report “Panorama of Alicante” prepared by the Office of Chamber Research in collaboration with Caixabank and presented at the exhibition Marc Alicante. They summarize 2023 and also predict what will happen in 2024.

The person who presented the report was Pastor of Maria del Carmenhead of the Cabinet of Ministers Research and statistics in the ward trade Alicante. In his forecast for 2024, he assures that the Alicante economy can improve if more moderate inflation, which may ease in the second half of the year, and better financial prospects.

For example, The real estate market outlook for 2024 remains favorable. He Population growth and the dynamism of new household formation will continue to drive demand for housing., which will also be facilitated by the gradual recovery of European economies and the expected reduction in interest rates. All this will lead to an upward trend in prices while the supply of new housing remains limited.

Exports will benefit if inflation calms down

According to the report, other possible beneficiaries of this rate cut will be Alicante’s exports, which are close to 7 billion euros. Of course, cargo transport from the port of Alicante had similar figures in 2023 and 2024. There was an increase in the volume of solid cargo, but a decrease in the volume of goods.

On the other hand, the industrial sector benefited from lower electricity costs and marine tariffs. Yes indeed This is a sector more sensitive to changes in external demand, which has slowed in 2023.. Industrial production fell by 7% in 2023, more than in the Valencian Community and the national average. The fall, which Pastor says is a response to “high specialization of industry in consumer and processing industries, as in the late leather and shoes, toys, furniture or textiles.” Metal, rubber and plastic products also fell to a lesser extent.

And, according to the report, there is a lack of purchasing power from the EU, with industrial exports in the European Union falling by 3%. Of course, at the end of 2023, Alicante already had the best industrial performance with a slight increase.

The agricultural sector has been hit by drought and bad weather, but exports are still up in 2023 and are starting to add numbers similar to footwear, the province’s leading exporter.

In total, more than 70% of the province’s exports were horticultural products, footwear, food and beverages, textiles, machinery, electrical and electronic materials, plastics, aluminum and chemical products. Thus, 63% of the province’s exports went to the European Union-27 and mainly to the euro area, a market in which 54% of the province’s foreign sales are concentrated. In the non-EU market, sales to Latin America, the US, Asia and the Maghreb fell, while sales to European countries not integrated into the EU27 increased due to increased sales to the UK and Norway.

tourism is growing

Tourist activity in the province of Alicante has increased its growth in 2023. The favorable evolution of the labor and other markets, as well as the tendency of households to prioritize travel spending, continue to stimulate demand as prices for tourism services rise in the province of Alicante. response to ever-increasing costs. No wonder there are traffic jams at Alicante-Elche airport exceeded 15.7 million passengers, and cruise traffic in Alicante reached 85 cruise ships and almost 200,000 cruise passengers..

In addition, the territorial director Kaishabank in the Valencian Community and the Region of Murcia, Olga Garcia and the president Chamber of Alicante, Carlos Bagno extends cooperation agreement is supported by both institutions with the aim of promoting economic and business activity, as well as promoting internationalization, competitiveness and training through products and services to support companies, self-employed workers and entrepreneurs in the province of Alicante. This time they are focusing on activities related to the Next Generation European Recovery Plan, thanks to the chamber’s work in developing, promoting and drafting business projects in the province of Alicante that can attract them. After the signing, a report on the economic situation was presented to the Marche. ‘Panorama of Alicante’ with the participation of the President of the Provincial Council of Alicante, Tony Perez.

The Territorial Director of CaixaBank for the Valencian Community and Region of Murcia emphasized “ the organization’s commitment to promoting the activities of Alicante companies that are key to the development of the economy In turn, Carlos Baño thanked CaixaBank for its cooperation with the Chamber and its commitment to “the business structure of our province.” Our mission is to be a useful tool for entrepreneurs, and the signing of similar cooperation agreements We seek to promote economic and business activity, as well as promote internationalization, competitiveness and learning.through products and services to support companies, self-employed workers and entrepreneurs in the Alicante regions.

The President of the Provincial Council noted that the province of Alicante “has a consolidated and powerful business muscle that acts as the engine of our economy, with small, large and medium-sized companies acting as the driving force of our employment and our growth.” export”.