SANTA CRUZ DE TENERIFE, 15 Feb. (EUROPA PRESS) –
The Canary Islands economy will grow this year by 2.8%, double the national average and will rebound to 3.3% of the Gross Domestic Product (GDP) in 2024, which will allow the creation of some 69,000 jobs in two years, according to includes the annual economic outlook report prepared by BBVA Research.
The document, presented this Wednesday by Miguel Cardoso, the entity’s chief economist for Spain, certifies that the economy of the islands would close the year 2022 with an increase of 10.7% and that the GDP prior to the pandemic will not recover until the end of the year. of 2024.
The study acknowledges a slowdown in the Canary Islands economy since the second half of last year but understands that it will be short-lived given that for now, there is no “exhaustion” of the lack of confinement and therefore the desire to travel remains, something that especially benefits the Canary Islands as a tourist destination.
Cardoso has acknowledged that 2023 still presents “uncertainties” derived from the effects of the war in Ukraine, which affect the supply chain and inflation, and the rise in interest rates, but has assured that “sectoral imbalances” are not observed. in the economy of the archipelago.
The entity manages that interest rates will have a maximum ceiling of 4.5%, which can “subtract resources” from investment by companies and consumption by families, but in the specific case of mortgages, it has indicated that families are “better prepared” than in 2008 to face the increase in payments, among other things because there are savings accumulated during the pandemic.
TOURISM AND PUBLIC SECTOR WILL PULL GROWTH
He has indicated that tourism and the public sector, especially through spending on health, will continue to boost the Canary Islands economy this year and has recognized that “something is being done right” on the islands because despite the exhaustion of the effect of lack of confinement, Tourists continue to come to the Canary Islands, something that has been attributed to the improvement in the quality of the destination and perhaps to geopolitical tensions in competing destinations.
“There are hopeful signs,” he commented, although he has acknowledged that the “structural problem” of “lack of productivity” persists, which implies a slowdown in recovering the GDP figures prior to the pandemic.
In his opinion, part of the problem is due to the lack of training of workers, especially those who come from unemployment.
Regarding the execution of the funds, Next Generation has acknowledged that the pace is “excessively slow and will continue to be slow” but understands that there have also been too many “expectations” because the program was linked to compensating for the drop in demand during the pandemic and in the end it has been plagued by the same problems as the European structural funds, the bureaucracy and the supervision of the European authorities.
Likewise, and asked about an eventual tax cut, he pointed out that it depends on political decisions and he believes that, once the economy stabilizes, society should ask itself about “the spending it wants”, the productivity of public administrations and the provision of the services.
Regarding the possible risks of the Canary Islands economy, he has warned of the possibility of losing the relationship between prices and competitiveness in tourism, the increase in the prices of air tickets and inflation, which in the case of food still does not reach its turning point, and the lack of qualified labor for companies.
Cardoso has also said that the Canary Islands will close 2022 with a deficit of 0.5% of GDP and this year he has designed expansionary budgets from a fiscal point of view and with a sharp increase in public spending, so he believes that in 2024, when they recover fiscal rules, some kind of adjustment will have to be made.
