levels

This figure shows a return to a rate closer to that of March 2022, in which the balance of advances stood at lower levels than now, at 33,952 million euros. The dean of Official College of Economists of Alicante, Francisco Menargues, points out that this circumstance is due to the fact that, in general, in the In the year 2022 there was a favorable evolution of the productive activity, at least until the middle of the yearand that afterwards there was a significant worsening of economic expectations for 2023.

So much so, says Menargues, that Bank of Spain surveys show that only 4.3% of companies think that their sales will grow in 2023, a decrease of more than 23% compared to previous years. “This negative perception regarding growth is especially serious for SMEs, which are financed mainly with bank loans or discounts on paper, and that given the uncertainty of what is to come, they prefer not to risk it,” says Menargues.

The circumstances also explain why the volume of loans granted falls well below the figures registered a year ago. In September 2021, the credit granted amounted to 36,699 million, 2,608 million euros more than in September 2022. Francisco Menargues points out that, in addition to the poor growth prospects, several factors are added, such as the tightening of banking conditions, that not only go through the rise in interest rates but also for requesting stronger endorsements.

“SMEs usually offer fewer guarantees to banks, so entities are more cautious about leaving money or looking for these companies to be financed with public guarantees, through ICO loans or an entity that offers this type of credit guarantees, such as the Valencian Institute of Finance“, points out the dean of the Official College of Economists of Alicante.

Francisco Menargues explains that banks have always worked the same and that there is nothing new in the strategy that they are carrying out now. “The entities try to anticipate to know which are going to be the sectors that will not be leading during the next year and from the outset they establish restrictions for them, as in 2008 with the construction sector. If the entities foresee that 2023 is going to be a bad year for logistics, they will ask for more guarantees for this type of company than for one in a sector that they expect to grow.”

Alert factors

Finding a single cause to understand what economic moment we are in is complicated. Francisco Menargues points out that they are several worrying factors that make the business fabric have to be more attentive during the year 2023.

According to the competitiveness studies carried out by the General Council of Economiststhe Dean of Alicante points out that they have been able to observe how companies in the province are losing competitiveness compared to others, such as Valencia, Malaga or Murcia. “Provinces that previously behaved like ours have begun to see that they are outperforming us, now we are less efficient and that is causing our figures to no longer be as good as before.”

“Sectors in which we were leaders are falling a bit behind”indicates Menargues. Among them construction, which due to financing costs and material costs make housing prices less competitive here compared to other places. “Tourism also stands out, one of the sectors in which Alicante has always been at the forefront. There are other provinces that have stepped up and that has made our number of overnight stays is decreasing“, says the Dean.

Also, fewer and fewer companies are being created in the province if we compare it with previous periods, specifically, a 33% decrease compared to the third quarter of 2021. “We do not want to be alarmist, it is growing but at a slower rate than expected, even so we have to be aware of the situation and put our batteries together,” Menargues points out.

An uncertain future

From the College of Economists of Alicante they are clear, they anticipate that the first two quarters of 2023 the economic evolution is not good. “It is being noticed since the last quarter of 2022, we are hearing that the GDP has grown but the truth is that Spain’s real GDP in the third quarter was already 1.8% lower than in 2019” says Francisco Menargues.

“It is anticipated that we are going to enter a time in which, although there will be no recessionIf we are going to have a slower rate of growth, all the sectors are going to act accordingly and, if the interest rates are higher, fewer companies will be able to access credit to finance themselves and stay afloat“, Indica Menargues.

The forecasts for 2023 of the economists also go through the fact that interest rates keep rising Although calculations indicate that will stabilize at 4%. “Despite this, the economy is going to contract, this means that there will be less consumption, companies will produce less and, therefore, some adjustments will have to be made,” says the dean.

Anyway, Francisco Menargues, hopes that reality will not be as extreme as forecasts and that inflation can be controlled, which would allow the sectors to be adjusted. “Whenever there is a stage of inflation, there are difficult times because everyone has to adjust, inflation makes us poorer, especially those with fewer resources. Let’s hope this situation passes quickly and everything returns to normal” says Menargues.