Economic growth: Is anyone making accurate predictions?
Esade compares the estimates of 25 entities and organizations with the final result of GDP growth, inflation and employment
BarcelonaFor the third consecutive year, reality has exceeded forecasts for the Spanish economy. On average, 25 research institutions and departments calculated that Spain's gross domestic product (GDP) would increase by around 2.1%, while it ultimately grew by 2.8%, a difference of seven-tenths of a percentage point. Ceprede-UAM (Center for Economic Forecasting-Autonomous University of Madrid) and CEEM-URJC (Center for Economic Studies of Madrid-King Juan Carlos University) came closest to the final result, with a forecast of 2.5%, a deviation of three-tenths of a percentage point from the actual growth.
Behind these two organizations are CaixaBank Research, the Complutense Institute of Economic Analysis (ICAE-UCM), and Loyola University Andalusia, each with 2.3%, placing them five-tenths of a percentage point below actual growth, according to Diana Esade. This is an annual analysis by the business school that compares the economic, inflation, and employment forecasts of the entities that make up the panel of Funcas, the foundation of the former savings banks, with the actual final results for each year. The evolution shown in this analysis, which has been conducted since 2010, is even more surprising considering that in the first part of the year, US President Donald Trump's announcements regarding the imposition of tariffs caused considerable uncertainty. These threats "suggested more of a worsening of the Spanish economy than an additional upside surprise," according to Omar Rachedi, professor of economics at Esade and co-author of this study with his colleague, Andrés Souza. But once again, reality surpassed predictions.
According to the authors, Intermoney and Funcas (1.8%) were the institutions that deviated most from the final real growth forecast for 2025. Specifically, they were one percentage point off (1.8% versus the actual 2.8%). Over the last three years, the Spanish government has been the institution whose forecasts, on average, have come closest to the final projections for this period, with a deviation of five-tenths of a percentage point from real growth. Next come CEPREDE-UAM (0.6%), Loyola University Andalusia (0.7%), the Bank of Spain (0.7%), and CaixaBank Research and CEEM-URJC, both with 0.8% growth. Those that fell furthest short were Oxford Economics (1.5%), the Institute of Economic Studies (IEE), think tank Linked to the CEOE (1.4) and Banco Santander and the CEOE (1.3 each).
More activity, higher prices
In the inflation section, the entities analyzed in this case underestimated the figures, estimating an annual rate of 2.2%. In contrast, the year ended at 2.7%. CEEM-URJC, with 2.8%, 0.1 percentage points above the final result for the year, came closest to the final figure, followed by CaixaBank Research and ICAE-UCM, each with 2.5%, and therefore two-tenths of a percentage point off. The research departments that fell furthest short of the final inflation result were the Independent Authority for Fiscal Responsibility (AIReF), the Bank of Spain, and the CEOE (Spanish Confederation of Employers' Organizations), which predicted 2%, seven-tenths of a percentage point lower. Over the last three years, ICAE-UCM, CEOE, Ceprede-UAM, and Mapfre Economics came closest, with deviations of 0.07, 0.23, and 0.27 percentage points, respectively. And Funcas (0.87), the Bank of Spain (0.80), and Equipo Económico (0.73) are the ones that have accumulated the greatest deviations.
Souza, the other author from Diana Esade, points out that the other side of the coin of higher-than-expected growth "is that inflation has also exceeded forecasts." In any case, he emphasizes that inflation is above the European Central Bank's (ECB) 2% target, "but we are still close to this threshold and not facing a scenario of runaway inflation," for now.
Regarding unemployment forecasts, only ICAE-UCM accurately predicted the unemployment rate of 10.5%, exactly the rate at which the year ended, while the average forecast was 11%. Behind the sole winner were Metyis, with 10.6%, and CEEM-URJC. The furthest off were Repsol (12.2%) and Oxford Economics (11.5%). Over the last three years, the least off-target predictions were made by Funcas and Loyola Andalucía (both 0.28) and the Spanish government (0.31); while the most off-target predictions were made by Repsol (1.22), Ceprede-UAM (1.12), and AFI (1.02).