The definition of a technical recession is when a country experiences a back-to-back decline for 2 consecutive quarters in the GDP, and BNP Paribas believes this will be the case in Spain in the coming quarters. The French bank BNP Paribas estimates growth for Spain of 4.3% in 2022 and 0.5% in 2023, although it expects the Spanish economy to enter a technical recession by falling 0.4% in the last quarter of this year and 0.2% in the first quarter of next year.
As for other neighbouring countries, the bank estimates that France will grow by 2.3% this year and 0.5% next year, and Germany will grow by 1.4% and 0.4%, respectively.
The French bank says in a recent report that a recession in Europe "is inevitable" in the last quarter of this year, although it will not be very deep thanks to the support of the public sector.
The firm has lowered its global growth forecast for this year to 3%, the same figure it expects for next year. The United States, meanwhile, will grow by 1.8% in 2022 and 1.3% in 2023, with a less negative long-term forecast than Europe.
As for inflation, Spain will close the year with a CPI of 8.9%, a percentage that will fall significantly in the following years to 4.5% in 2023 and 1.9% the following year, even below the target of the European Central Bank (ECB). Germany will have inflation of 8.1% this year and 4.7% next year, while France's inflation will be 5.8% in 2022 and 4.2% the following year. The United States will moderate its figures further, with CPI of 7.8% in 2022 and 3% in 2023.
As for the markets, BNP Paribas expects volatility to continue, especially in Europe and in currencies. The bank remains cautious on European equities and expects corporate earnings to be revised downwards, while it is neutral on US equities.
Growth in 2022 in line with consensus
The French bank's figures for the year as a whole are in line with the estimates of the consensus of experts grouped together by the Funcas Panel, which estimates GDP growth this year of 4.2%, and also of the government, which estimates 4.3%. It also forecasts a similar behaviour of inflation (8.6% in the case of the Funcas Panel).
However, its forecast is much more moderate for 2023. The Panel expects activity to grow by 1.9%, compared with the 0.5% forecast by BNP Paribas.