Spain weathered relatively well the negative shocks unleashed by Russia’s war of aggression against Ukraine in 2022. Economic activity is expected to gradually pick up in the first half of 2023 and to gain further momentum in the second half of the year. Overall, GDP growth is set to reach 1.4% in 2023. As inflation moderates, stronger private consumption and a further normalization of tourism are expected to sustain activity throughout the year. Inflationary headwinds this year are expected to be partially eased by the measures implemented by the government to mitigate the impact of high energy prices.
Portugal’s economy continued growing in the final quarter of 2022, despite challenging global conditions. On an annual basis, growth in 2022 is estimated at 6.7%, up from 5.5% in 2021. Private consumption and net exports contributed significantly to the expansion, benefiting from a strong rebound in tourism after the lifting of COVID-19 restrictions. On the production side, industrial production and construction remained relatively weak, particularly in the last quarter of the year, due to unfavourable external conditions and volatile commodity prices. In 2023 as whole, growth is forecast to slow down to 1.0%. Headline inflation rose from 9.5% (y-o-y) in 2022-Q3 to 10.2%.
As for the impact of EU Taxonomy some reflections should be made.
- To achieve climate neutrality in the EU by 2050, the “Fit for 55” package includes updating and tightening the Energy Performance of Buildings Directive (EPBD). All new buildings are to be zero emission buildings by 2030 at the latest. For new buildings in public ownership, the target is 2028. Existing buildings must be transformed to zero emission buildings by 2050.
- ESG factors and corresponding legal regulations have become increasingly important in the real estate industry. This is because they affect the entire life cycle of a property - from financing and planning to realization, construction, and use, and ultimately, to selling it. The risk of a property losing value or even becoming a “stranded asset” because sustainability criteria are not met is there- fore an issue of concern for all parties involved in the real estate industry.
To sum up: EU Taxonomy defines when economic activities are environmentally sustainable. It is already clear that both the EU and national legislators will further tighten the existing legislation. If the annual targets for achieving Net Zero in the real estate industry are not met, the legislator will attempt to counteract this with new legislative measures. The real estate industry will therefore have to adapt to constantly changing conditions in coming years.