The Spanish economy has not registered such a sudden or vertical takeoff as predicted by multilateral institutions such as the IMF or the OECD, the European Commission itself, the Government or a substantial part of private analysis. But the exit from the worst recession since the Civil War, as a result of the Great Pandemic, has been dazzling enough to place Hispanic GDP at the forefront of dynamism in 2022. This is reflected in the International Monetary Fund in its Outlook report of the Fall World Economy. In which, although it relegates the return to Spanish prosperity at a rate lower than that of four of the G-7 economies (United Kingdom, France, USA and Italy, in this order, according to the vigor that their productive levels have acquired nationals), confirms that it will be the one with the highest altitude and the one with the most stable navigation sheet. During the whole of next year. Judging by the IMF, Spain’s GDP will be the one that will advance the most in 2022 among the high-income powers. 6.4%; after staying at 5.7% this year. Seven tenths below the IMF’s own spring predictions – barely six months ago – although 1.7 points more than the increase issued then for 2022.
Jug of cold water for the Government: GDP only rose 1.1% in the second quarter of 2021
The slower pace of recovery – which began in the second quarter, with the acceleration of the Covid-19 vaccination campaigns and which has been certified by the INE – will turn into a cruising speed that will dominate the global industrialized spectrum .
The experts of the multilateral institution therefore assume the revisionist theses of the INE for this year; after it revised downward by almost two points in GDP growth between April and June. From 2.8% of its first estimate, to 1.1% of its September update. And corroborate the six-tenths break in the first quarter of the year, when the fifth wave of the epidemic worsened. However, the Fund remains optimistic about the Spanish roadmap for next year, despite reducing the trajectories set for this year by the OECD -6.8% -, the ECB -6.3% – of the Economic Vice-presidency, which still places it at 6.5% or even the Bank of Spain, which continues to give the summer period a quarterly increase of 2.7%. Without going into assessing the moment in which the Spanish economy will recover the levels prior to the pandemic, which the OECD delays until well into 2023 and the Government already at the end of this year, along with employment and Social Security affiliation. Due to the high levels of uncertainty that still reign over the resumption of value chains, of both trade and investment flows and, above all, of the ‘energy crunch’ that has shown signs of special effervescence in the run-up to and first weeks of autumn due to the gradual and rampant rise in energy prices and its impact on electricity bills; at all-time highs across the EU and China – as well as other Asian markets – and is already making a dent in the US.
Some doubts that Moncloa also relies on to preserve its macroeconomic picture in which it maintains a growth prediction of 7% in 2022. “It is a period of great and rapid changes in the short-term evolution of economic activity that, both due to their origin as well as their magnitude, they represent an unprecedented statistical challenge ”, pointed out the INE in its note of clarification. While Vice President Nadia Calviño stressed that “2021 goes from less to more” and that “all indicators confirmed that the recovery was already underway” during the second quarter to justify their official forecasts.
After the publication of this report, the Secretary of State for the Economy, Gonzalo García Andrés, has indicated in his Twitter account that “the IMF certifies that Spain will lead economic growth in 2022, it will be the most dynamic country in the EU. It confirms that the recovery is going from low to high and will intensify. He expects deficit and debt reduction to accelerate. ”
The IMF subscribes to the market doctrine of the reappearance of the inflationary specter, which has, in turn, resurfaced the specter of stagflation; economies idling with high price rises. Based on the diagnosis of the International Energy Agency (IEA, according to its acronym in English), which links the “strong increase in natural gas”, among others, to a “greater than expected rebound in global energy demand” for meet the vigor of the post-Covid business cycle, “after a long and cold winter” -the past- that “drained inventories” in the EU and China, as well as climate distortions, which “have decreased generation from renewable sources, such as wind, in recent weeks ”and which aggravated energy needs in East Asia and North America with the cold waves in the first quarter of the year. These were followed by episodes of extreme heat in Asia and drought in other latitudes of the planet, such as Brazil.
To these factors must be added a planning deficit and delays in the resumption of value chains after the epidemic, which have created production reductions in liquefied natural gas (LNG). Even so, – says the WEO – the reestablishment of activity “has followed the dynamic patterns expected for the first semester,” due to the evolution of vaccines among high-income nations. And despite the “distortions” regarding emerging and developing markets. To a large extent, due to the persistence of the fiscal and monetary stimulus programs. Although in the financial order, he admits that inflationary pressures generate conjunctural uncertainty. Of course, “without disturbing”, at least for the moment, the roadmap of the main central banks of industrialized nations – where the rise in the CPI’s has taken root to a greater extent – in which the increases in interest rates are place, according to their official records, throughout 2023.
The IMF drives away the specter of ‘stagflation’
In this area, the Fund stands out from stagflation. He considers that the rise in oil, of almost 60% compared to the lowest levels of the barrel in 2020, and of around 30% of non-energy raw materials -which has boosted the shopping basket due to the increase in transport prices on Food, also on the rise in international markets, has been the cause of the darkening of the CPI. And the factors that have triggered inflationary risks and fears of stagflation for the first time since the oil crisis of the 1970s. But, in the opinion of its experts, despite the “uncertainty”, it will return to its “pre-pandemic range” throughout 2022, “once the onslaught between energy supply and demand is resolved”, higher creation rates emerge. of employment -still at pre-Covid-19 values and dynamics of digitization and energy neutrality are settling.
Among the industrialized powers, the CPIs will once again be under control. As in Spain, which forecasts a rise of 2.2 points throughout the current year, and a more modest six-tenths increase, of 1.6%, in 2022. Until the indicator, at the end of the year, is at 2.5% and 1.4% the next. After registering a drop of half a point in 2020. For high-income countries as a whole, the IMF forecasts inflation of 2.8% this year and 2.3% the next. Compared to 5.5% and 4.9% of emerging nations.
Growth, for the IMF, is on track. The first premise of stagflation will not be seen either; nor in the industrialized orbit. Despite the downgrading of its dynamism since last spring. Both in the US, where the report’s calculations reflect the decline in inventories and disruptions in supply chains or the reduction in consumption during the summer phase. As in Germany, due to the loss of its manufacturing muscle due to the disorderly supply in recent months. Or in Japan, whose GDP already reflects the effects of the fourth state of emergency, decreed between July and September. But that incorporates the resources of the infrastructure plan recently approved by the Senate and the legislation that strengthens the safety net of social programs; worth $ 4 trillion in spending for the next ten years.
In addition to Next Generation EU funds with guarantees and loans for its partners. The block of high-income countries predicts a “first half of 2022 with a strong rebound in activity.” Not surprisingly, the IMF foresees a rise in its joint GDP of 5.9% this year and 4.9% next, only half a point and two tenths -respectively- below that of emerging markets; generally much more dynamic. And to which the IMF cuts its predictions for 2022 in quantitative and qualitative terms. The Spanish economy will grow well above the average for industrialized powers and emerging markets next year.
More doubts remain from the Fund about job creation, which will experience ups and downs. In general, “youth employment and low-skilled employment will evolve weakly.” Although in this case, the resumption of job creation will also depend on the “reactivation of value chains, the production of microchips and industrial components and the normalization of trade flows and routes.”
The exchange of goods and merchandise will grow by 9.7% this year -after the historic contraction of 8.2% in 2020 in peacetime-, a rate that will slow down to 6.7% in 2022. Which leads to thinking in the persistence of certain bottlenecks in the transit of global trade. In particular, “in the distribution and the price of the containers”. With an oil rise of 59.1% that will sustain the price of a barrel above the current $ 80 set by Brent, a benchmark in the EU, with a minimum correction of 1.8% in 2022, which ventures a “ certain stability ”that removes several predictions – such as that of Goldman Sachs – that did not rule out a three-digit price.
“Contained nominal wage inflation”
From Spain, the fund also provides an improvement in per capita income, with increases of 5.6% and 5.9% that correct the decrease of 10.8% in the year of the epidemic. With wages that will preserve moderation, even with the increase in the minimum wage and its gradual increase for 2021. Because, in the opinion of the IMF, “nominal wage inflation” is being “contained in certain countries” -among which it cites , in addition to Spain, the United States, Canada, Germany or the United Kingdom – “even after adjustments for the effects of the Great Pandemic”, social assistance and measures related to increasing pensions “.
In fact, the Spanish economy is granted an annualized quarter-on-quarter increase between October and December of 7.4% this year. Data that invites us to presage that the growth rate will accentuate with more vigor in the final quarter of 2021. But that will not immediately translate into greater job creation, since the fund forecasts an unemployment rate of 15.4% this year and the 14.8% in 2022 that leaves Spain as one of the only three economies in the euro – along with the Greek and the Italian – with double digits in its indicator with respect to the entire workforce.