Lower growth projections aren’t impacting on earnings. For now…

The eventual downturn in the global economy which most analysts are now predicting is casting a shadow on results season. The downward revisions, especially in the German economy due to the shortage of logistics elements, are weighing down growth expectations in the eurozone. However, the chief economist at MAPFRE Inversión, Alberto Matellán, has a less negative interpretation of the situation and envisions a more promising long-term scenario, in which “other sectors or neighboring countries can take over.” In his opinion, the lowered estimates for Spain, to which MAPFRE Economics added this week its forecast of 5.7% growth for the year, are still a reflection of what is happening in other economies.

Another lingering concern for experts is the high level of inflation, explained by external factors involving the energy sector and its impact on work and transportation, which could result in “a lack of subsequent growth.” In fact, investors wonder if we are facing a context of stagflation, something that Alberto Matellán rules out, since, “despite the less optimistic expectations, there is still growth.” These messages will have special weight at the next Fed meeting, where a shift in language is expected to signal a slowdown in stimulus starting next year.

But for now, this less-than-encouraging news does not seem to be impacting business results, which the expert finds interesting. Along these lines, he suggests two issues to consider: “Companies’ roadmaps, which aren't bad, although it would be better for them to be prudent and then adjust upwards; and corporations’ efforts to withstand the impact of higher prices on their margins.”