Portugal & Spain
General market conditions are currently slow in Portugal and Spain. Secondary aluminium prices are going down and overall demand for copper, copper alloys and aluminium is weak in Europe and Asia.
Although 2022 was ultimately one of the strongest years for Portugal in terms of economic growth, the first quarter of 2023 hasn’t been as successful, with the tendency towards a slowdown. The country is still struggling with high levels of inflation which are negatively impacting private consumption. The housing sector remains one of the main concerns for the government; rental prices grew 37% in 2022 and, in order to deal with the crisis, Portugal decided to stop the golden visa programme, the suspension of which could lead to the loss of over Euro 600 million of investment into the economy, including a possible 1000 jobs that might otherwise have been created.
The European Commission has predicted slight growth for the Portuguese economy in the second quarter of 2023 but the country is unlikely to match the outstanding performance of a year earlier as its GDP growth is highly unlikely to exceed 1%.
Notwithstanding all the challenges it had to face, the Spanish economy showed great resilience in 2022 with growth of 5.5%, and it is expected to continue this trend in the coming years. One of the main factors behind the predicted growth is an existing recovery potential that hasn’t been fully used following the pandemic, especially in the construction, international tourism and automotive sectors. These are expected to perform well in the coming months, thus contributing to GDP growth.
Despite the positive trends, continuous increases in consumer prices in Spain have resulted in a 0.1 percentage point uptick in the inflation rate within the last month. Fresh food and energy prices are the most affected owing to disrupted supply chains and the ongoing Ukraine conflict.