The CCE warns of the “slowdown” of the Canarian economy

Tourists on a terrace in the town of Playa Blanca, in Lanzarote. / CARRASCO

The tightening of monetary policy together with global uncertainty suggest a cooling of tourist activity in the archipelago

Silvia Fernandez

The Canarian Confederation of Entrepreneurs (CCE) warns in its latest situation report, published yesterday, of the risk of "slowdown" that looms over the Canary Islands economy in the coming months.

After
a second trimester of the year in which the economy of the islands has grown above the State, with a rise of 2.4%, thanks to tourism, the forecast is that the
uncertainty of the coming months take their toll. The increase in interest rates - it is expected that the ECB will raise them half a point more at the September meeting, up to 1% - also works against the economy of the islands.

“The good pace shown by the economy of the Canary Islands is based on the recovery of the tourism sector in these summer months; however, the tightening of monetary policy, together with the rest of the risk factors and the uncertainty that these generate in the international context may slow down growth in the coming months", it is pointed out in the
CEC reportthus confirming the forecasts advanced during the presentation of its annual report last July.

The good data of the year can change

The employer highlights in the report not only the good performance of tourism in the first part of this year and in general of the sector
servicesbut also that of the
buildingwhich grew by 4.7% quarter-on-quarter, and the
farmingwith an increase of 3.8% in its gross added value.

The improvement in economic activity consequently led to a rise in the
job last July, with 8,094 more affiliates, until a total of 838,998 were in a situation of job growth.

The growth was recorded above all in services, with 7,213 more workers in one month; the hotel industry, with 4,232 more employed persons and the health sector, with an increase of 3,133 personnel.

More workers in tourism than before the pandemic

There was also a substantial increase in the annual rate, with 63,366 more affiliates. Even compared to before the pandemic, July closed on the islands with 19,782 more workers.

Although, here the employer warns that the increase in employment has been concentrated in the branches of activity linked to the
public sector, with the public administration and health, which contributed 18,957 workers; while other "key" branches of activity for the productive fabric of the islands such as hospitality, commerce or transport continue below pre-pandemic values, with 4,062 fewer affiliates.

The
inflation It is one of the most worrying issues. The CCE points out that second-round effects are beginning to have repercussions on the most structural elements of prices as evidence that underlying inflation (which leaves out fresh food and energy, the most volatile in the shopping basket) has increased by 5.9% in the interannual rate.

In general terms, prices grew in July on the islands by 9.4% in annual rate, below the state 10.8%. Electricity and fuel pushed down the prices of housing and transport again.

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