Spain’s economy grew by 0.5% in the second quarter of 2023 compared to the previous quarter, according to revised data from the INE statistics agency.
Earlier, an increase of 0.4% was announced. At the same time, analysts did not expect a revision, Trading Economics reports.
Business investment increased by 1.9%, including 3.6% in the construction sector. Consumer spending increased by 0.9%, government spending by 1.6%.
Meanwhile, exports declined by 3.1%, while imports fell by 2%.
Data for the first quarter were also improved: GDP growth was 0.6%, not 0.5%.
The Spanish economy grew by 2.2% in April-June compared to the same period last year, not 1.8% as previously reported. In the first quarter, the growth was 4.2%.
The Bank of Spain predicts a further slowdown in the country’s economic growth in the third quarter to 0.3%. By the end of 2023, GDP is expected to increase by 2.3%.
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The volume of Ukraine’s gross external debt increased by $8.8bn during the second quarter of this year and amounted to $148.6bn at the end of the half-year, according to the website of the National Bank of Ukraine (NBU).
“Relative to GDP, the debt increased from 90.5% to 92.7%,” the National Bank noted.
At the same time, the external debt of the public sector for the second quarter of 2023 increased by $8.4 billion to – $84.5 billion (52.7% of GDP), while the debt of the private sector – by $0.4 billion to $64.1 billion (40% of GDP).
As indicated by the National Bank, the growth in the public sector was due to net attraction of $8.8 billion in loans from international partners, including $3.6 billion from the International Monetary Fund (IMF), while the government debt on securities decreased by $0.12 billion.
According to the central bank, the volume of external liabilities of Ukrainian banks decreased by $0.08bn to $1.8bn (1.1% of GDP), mainly due to the reduction of debt on loans by a similar amount.
External debt of other sectors of the economy increased by $0.2bn to $41.3bn (25.8% of GDP). As explained by the regulator, this was due to the growth of external debt on guaranteed loans – by $0.14 billion and securities – by $0.05 billion.
Debt of other sectors of the economy, including intercompany debt, increased by $0.52 billion to $62.3 billion (38.9% of GDP) in the reporting quarter.
Direct intercompany debt of enterprises in direct investment relations increased by $0.28 billion to $21 billion (13.1% of GDP) in the quarter due to the increase in external debt on credits and loans of direct investors by $0.26 billion.
The NBU estimated the increase in private sector debt due to exchange rate changes at $0.4 bln.
The volume of overdue debt of the real sector on non-guaranteed loans (including from direct investors) increased by $0.13bn in April-June and amounted to $25.4bn (15.9% of GDP) at the end of the second quarter. According to the NBU, the share of Cyprus in it is 58.1%. In addition, the shares of the UK increased by 1 percentage point (p.p.), to 9.2%, and the Netherlands – by 3 p.p., to 5.8%.
According to the National Bank, Cyprus at the end of the second quarter remained the main creditor country in terms of the geographical structure of private sector debt on non-guaranteed loans (together with intercompany debt) – 49.2% of the total volume, its share since the beginning of the year increased by 0.4 p.p.
The shares of the Netherlands, Germany and Switzerland increased by 0.1 pp. to 7.3%, 3.0% and 2.6% respectively, while the share of the USA remained at 3.0% and the shares of the UK and Luxembourg decreased by 0.1 pp. – to 10.7%.
The main currency of Ukraine’s external borrowings at the end of Q2 2023 remains the US dollar – 50% of total external debt, but its share decreased by 3 p.p. over the quarter. At the same time, the share of borrowings in euros increased from 31.9% to 33.8%, as well as in SDRs to the IMF – from 9.9% to 11.4%, while the share of external debt in hryvnia decreased by 0.2 p.p. to 1.6%. – to 1.6%.
The volume of short-term external debt by residual maturity for the second quarter of 2023 increased by $1.2 billion and amounted to $40.8 billion as of June 30, 2023.
Meanwhile, general government liabilities that require repayment over the next 12 months increased by $0.9 billion to $3.8 billion due to higher future government loan repayments, including $0.2 billion to the IMF, while central bank repayments decreased by $0.18 billion to $1.3 billion due to lower IMF repayments.
The volume of short-term liabilities of the banking sector remained almost at the level of the previous quarter and amounted to $1.3 bln.
The total volume of real sector borrowings (together with intercompany debt), which are to be repaid over the next 12 months, increased by $0.5bn and amounted to $34.4bn as of June 30, 2023. The National Bank specified that the growth is due to an increase in the volume of future repayments on debt securities by $0.4bn.
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The macro forecast of the Ministry of Economy, which formed the basis of the draft state budget-2024, assumes a sharp improvement in the security situation from the second half of next year and, as one of the consequences, an acceleration of economic growth to 5% in 2024 and 7-7.5% in 2025-2026.
“Further economic development of Ukraine depends on the duration and active phase of military operations… Thanks to the military successes of Ukrainian defenders and protectors, a significant reduction of security risks is expected from the second half of 2024, which will positively affect the indicators of economic and social development of Ukraine for 2025-2026,” the document says.
According to the forecast, dated mid-June this year, inflation (at the end of the year) will fall to 10.8% next year, to 7% in 2025 and 5.8% in 2026.
Other estimates include unemployment falling from 18.8% this year to 10.8% in 2026.
In the formation of the revenue side is expected to increase revenues from the National Bank in 2025 to 103.9 billion UAH from 17.7 billion UAH in 2024 with a subsequent reduction to 15.4 billion UAH.
As reported, the government on Friday approved the draft state budget-2024 with revenues of UAH 1 trillion 746.3 billion, expenditures of UAH 3 trillion 108.2 billion and a marginal deficit of UAH 1 trillion 593.6 billion.
In relation to the current law on the state budget-2023, it is proposed to increase revenues by 25.6%, expenditures – by 7.6%, and reduce the deficit by 7.3%.
At the same time, this week the government submitted to the Rada a draft law No. 10038 with amendments to the state budget-2023 to increase its expenditures by 328.5 billion hryvnias due to the growth of internal loans by 207.6 billion hryvnias and external loans by 91.2 billion hryvnias.
Compared to it, revenues in the draft state budget-2024 are higher by 23.3%, or by 329.9 billion UAH, while expenditures are lower by 2.5%, or by 84 billion UAH, and the deficit – by 20.7%, or 416.8 billion UAH.
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The gross domestic product (GDP) of Ukraine after a decrease in the first quarter of 2023 by 10.5% against the first quarter of 2022 in the second and third quarters switched to growth, is indicated in the explanatory note to the government’s draft state budget for 2024.
“According to estimates of the Ministry of Economy, at the end of eight months, growth is 3%,” the document says.
According to it, “certain types of economic activities” managed to quickly adapt to the consequences of the destruction of the dam of the Kakhovskaya HPP.
“Better than expected results of economic activity are due to the rapid adaptation of enterprises to the new conditions of activity together with the recovery of domestic demand, which was the traditional driver of growth of the Ukrainian economy in previous years,” – noted in the explanatory note.
First Deputy Prime Minister and Minister of Economy Yulia Sviridenko announced last week that the forecast for GDP growth in 2023 had been raised to 4%, but the explanatory note still says that the economy will grow by 2.8% this year with inflation at 14.7%, although it fell to 8.6% in August.
According to the explanatory note, the Ministry of Economy as of mid-June this year predicted GDP growth next year by 5% with inflation falling to 10.8% at the end of the year.
The National Bank of Ukraine in late July raised its forecast for Ukraine’s GDP growth in 2023 from 2% to 2.9%, but lowered it for 2024 from 4.3% to 3.5%. In addition, the NBU improved its inflation estimate this year from 14.8% to 10.6%, and next year – to 8.5%.
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Ukraine’s negative balance of foreign trade in goods in January-July 2023 tripled to $13.879 billion from $4.315 billion in the same period of 2022, the State Statistics Service (Gosstat) reported on Thursday.
According to its data, exports of goods from Ukraine for the period under review decreased by 14.7% to $21.795 billion compared to January-July 2022, while imports increased by 19.4% to $35.673 billion.
The State Statistics Service clarified that in July-2023, compared to June-2023, seasonally adjusted exports decreased by 11.7% to $2.671 billion, while imports increased by 1.7% to $5.132 billion.
The seasonally adjusted foreign trade balance in July 2023 was negative and amounted to $2.461 billion, while in the previous month it was also negative – $2.018 billion.
The State Statistics Service clarified that foreign trade operations were conducted with partners from 225 countries. The Experts Club research project and Maksym Urakin have recently released an analytical video about the economies of Ukraine and the world – https://youtu.be/zCJ1cU3n0sY?si=whY2sRqoznCjmcb7
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The Ministry of Economy has raised its forecast for Ukraine’s gross domestic product (GDP) growth in 2023 to 4%, First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko said in Kyiv on Saturday at the annual meeting of the Yalta European Strategy organized by the Victor Pinchuk Foundation.
“This year, we believe that GDP growth will be 4%, although pessimists believe that 3%… We have maintained macro stability, this is the basis for further recovery of Ukraine,” she said.
Svyrydenko clarified to Interfax-Ukraine that the government has not yet approved the forecast for 2024, while the National Bank of Ukraine expects GDP growth of 3.5%, and up to 6.8% in 2025.
“We are always more optimistic than the National Bank,” the First Deputy Prime Minister and Minister of Economy said.
She added that inflation, according to the NBU’s forecast, will slow to 10.6% this year, and core inflation to 9%.
In her speech, the First Vice Prime Minister also reminded that the NBU had recently cut the discount rate to 22% per annum.
“As a participant in this discussion, I will say that I was in favor of a bigger reduction. I think that our macroeconomic situation allows us to be more flexible, but, as always, realistic,” Svyrydenko said.
According to her, the Ministry of Economy sees improvements in the agricultural sector and expects that in November a working instrument for military insurance will be created through the efforts of both the Ukrainian government and the European Bank for Reconstruction and Development (EBRD).
The First Deputy Prime Minister emphasized that the government is also actively working on a four-year development plan under the Ukraine Facility program announced by the EU, which will start operating in early 2024 and will become the basis for further growth of its economy.
As reported, in June, the Ministry of Economy slightly downgraded its GDP forecast for this year from 3.2% to 2.8% due to the destruction of the Kakhovka hydroelectric power plant and pessimistic expectations for the upcoming harvest. According to Natalia Gorshkova, Director of the Strategic Planning and Macroeconomic Forecasting Department of the Ministry of Economy, in early August, the Ministry had already assumed economic growth of 5% in 2023, but so far it has conservatively maintained the 2.8% estimate, taking into account the existing risks. At that time, the Ministry of Economy predicted that GDP growth would accelerate to 5% next year, with inflation slowing to 10.8%.
At the end of July, the National Bank of Ukraine raised its forecast for Ukraine’s GDP growth in 2023 from 2% to 2.9%, but lowered it for 2024 from 4.3% to 3.5%. In addition, the NBU improved its inflation estimate this year from 14.8% to 10.6%, and next year to 8.5%.
In August, inflation in Ukraine fell to 8.6% in annual terms.
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