The auditors predict that the Valencian economy will recover by the end of 2023

This professional group is pessimistic about the magnitude of the improvement and predicts an increase in bankruptcy proceedings.

The College of Auditors of the Valencian Community has presented the conclusions of its Analysis of the Economic Situation 2022, the result of a survey carried out among the group of audit professionals with more than 350 responses. The conclusions show an x-ray of the reality that the companies of our autonomy live after the crisis caused by two years of pandemic and a war in Europe, from the perspective of professionals who know first-hand the economic and financial situation of the companies in Valencia , Alicante and Castellón.

Many of the Valencian entities that have suffered the most from this crisis have placed their hope in the end of the restrictions against the pandemic as the beginning of economic recovery. However, the Russian invasion of Ukrainian territory has again put the European and world economy in check. Thus, 70% of the auditors place the economic recovery at the end of 2023. "A year ago, we predicted that the crisis could end at the end of 2022, however, this new scenario in which we find ourselves has delayed the forecasts for a year that we estimated", explains Rafael Nava, president of the Association of Auditors of the Valencian Community. To this is added that the group warns that economic growth will be much lower than that estimated by the last Funcas panel (4.8%).

"Another of the conclusions we have reached is that, unlike the beginning of the economic crisis in which tourism and hospitality were the most affected, in this case industry has been the sector most affected due to the increase in prices. and shortages of raw materials," says the president of the College of Auditors. In addition to industry, the automotive industry is the next sector hardest hit by the crisis in the region.

These economic difficulties, as occurred in the previous one, have also brought insolvency problems in Valencian companies. Proof of this is that during the first quarter of this year, bankruptcy proceedings grew in the community by up to 10%. Faced with this reality, audit professionals estimate that we will end the year with an increase of between 20 and 30%.

"The situation of the Valencian Community in this sense is especially sensitive due to the type of existing business fabric. An important part of this increase in the number of insolvencies has its origin in the insolvency proceedings of non-business natural persons and in the self-employed", Rafael Nava explained.

For its part, given the measures promoted by the Government in the so-called "anti-war plan", the auditors estimate that it will result in inflation being reduced by approximately 1 to 3 points. "We come from a few months with an inflation that has touched 10%, a historical figure in our country that is leaving consequences on a large scale in the companies of our autonomy", Nava recalled. In fact, according to this professional group, the biggest problem facing Valencian companies today is liquidity and the shortage of raw materials.