SANTA CRUZ DE TENERIFE, May 26. (EUROPE PRESS) –
The growth of the GDP of the Canary Islands will moderate in the whole of 2023 compared to the year 2022 but will continue to be positive, maintaining the initial forecasts of the Chamber of Commerce of Santa Cruz de Tenerife until reaching 3%, according to what is extracted from the Bulletin of Economic Situation for the first quarter of the year, presented today Friday by the Chamber of Commerce of Santa Cruz de Tenerife and CaixaBank.
At the press conference, the chamber’s president Santiago Sesé and the territorial director of CaixaBank in the Canary Islands, Manuel Afonso, agreed both on the results of the economy during the first three months of the year and on the growth forecasts for the Canary Islands.
Thus, according to the data extracted from the Canary Islands Institute of Statistics, during the first quarter of the year the GDP of the Archipelago grew by 2.9% in comparison with the fourth quarter of 2022, while the national GDP only grew by a 0.5% Similarly, in annual terms the Canary Islands managed to grow by 7.4%, while in Spain as a whole growth was 3.8%. Progress that has accelerated compared to previous quarters and in which all the productive sectors have participated, led by the good records of tourist activity.
“Several quarters ago, the Official Chamber of Commerce of Santa Cruz de Tenerife pointed out that the Canary Islands economy would show significant strength until the first quarter of this year, and it has been so. Once this moment has arrived, the forecasts for the next quarters also continue to be favorable, supported by the increase in connectivity and the volume of tourist reservations”, indicated the president of the entity.
From CaixaBank, the forecast is also optimistic and confident that the recovery will continue this year, despite the fact that uncertainty about the global economy and the European economy in particular is very high. “The indicators considered by our CaixaBank Research study service for the Canary Islands are being revised upwards due to the good progress of economic activity in the Archipelago, and everything points to GDP continuing on an upward path,” Manuel Afonso pointed out.
However, these projections continue to be subject to high uncertainty, motivated by the consequences that the change in course that monetary policy has undergone in the last year in order to counteract inflation may have on the real economy. The first quarter ended in the Canary Islands with inflation of 4.6%, which is 1.3 points above the country average (3.3%). In the case of underlying inflation, the difference between the Canary Islands and Spain was less pronounced, with an annual increase in the Islands of 7.9% that is maintained compared to the previous month, four tenths above the average for the State (7. 5%).
The effects that the rise in interest rates will have on the capacity for consumption and investment, and on the increase in debt and delinquency, are unknowns that we will begin to glimpse as the year progresses. In this sense, some doubts are beginning to arise about the capacity that private consumption may continue to have in the face of inflationary pressure and the rise in interest rates, since up to now it has been supported by the savings accumulated by households during the pandemic and by the good performance of employment, two factors that are starting to run out. On the supply side, interest rate growth is also viewed with concern, as it may have an impact on companies’ financial expenses and their investment capacity.
On the other hand, as a dynamic agent of the economy, there is also concern about the capacity and speed of the execution of projects led by the Administration, in an electoral year like the current one, especially in those projects linked to the Next Generation EU funds, which could become these are a missed opportunity for the Archipelago.
“An economic horizon that will continue to be adverse and that, therefore, will require stability, consensus and decision of the political leaders who will be elected next Sunday. Governments that must be capable of adopting the best economic, budgetary and fiscal policy decisions to that the Canary Islands successfully face the great challenges that it faces as a society and as a region”,
Sesé stated.
A DIRECT INTERLOCUTION.
Among the proposals put forward by the president, he highlighted the need for “governors who have the support of society on May 28 to maintain a direct and constant dialogue with the different economic and social agents to determine a common road map in economic matter, in which the strategic issues for the development of the Canary Islands are established, in the medium and long term, as well as the priorities to be adopted in each of the areas of action.”
In addition, he continued stating, “it must be a government capable of generating the necessary confidence in the business sector so that it can invest safely in the Archipelago. An objective for which, in Sesé’s opinion, “the modernization of the Administration must be prioritized also allowing, along with other changes related to governance and human resources, to be much more efficient and productive. In order to achieve these objectives, in addition, from the Chamber we believe that we must bet on public-private collaboration, which is giving such good results in all those areas of action where it is implemented”.
The chamber president also stressed that “an improvement in competitiveness will depend on the use and value that we give to our economic and fiscal regime. We have to strengthen our REF to diversify and internationalize our economy, to attract investments that qualify our economic development model and to dimension our productive fabric.In short, to promote a more favorable environment for the development and competitiveness of our companies which, in addition, will have to be accompanied by solutions that allow us to improve our productivity”.
For this, it will be necessary to bet decisively on training, on the qualification of unemployed and employed people, and on covering those jobs for which employers are not finding personnel on the Islands. In this need it will be crucial to undertake a decided commitment to Dual Vocational Training. “If we manage to improve productivity, we will improve our GDP per capita, we will be less vulnerable and we will have the capacity to increase wages, thereby favoring the reduction of poverty in the archipelago,” concludes Sesé.
Finally, Sesé openly denounced and showed the rejection that the recent anti-tourism demonstration that has taken place in the south of the island of Tenerife has generated in the institution, “whose call we dismiss as irresponsible because its consequences, far from achieving an objective short-sighted policy, can jeopardize the image and viability of the main engine of the economy and employment on the islands”.
On the other hand, Sesé continues, “from the Chamber we would like to value the fact that it has finally been achieved that the Ultraperipheral Regions have been exempted from the kerosene tax that affects air transport. One of the highest that, by not applied, it will contribute to maintaining the competitiveness of the destination compared to other territories without this implying that we stop betting on something that all the agents linked to the tourism sector are clear about, which is nothing other than the sustainability of the Canary Islands as a region and as a tourist destination. “.
