The economic forecasts with which the Government made the general state budgets remain unconvincing. What’s more, they begin to be considered as impossible. The last body to question these data has been the International Monetary Fund (IMF), which has applied a drastic cut to its previous estimates.
According to the new calculation, the Spanish economy will grow 4.6 percent this year, which represents a reduction of 1.1 points over its forecast for this year, which in October stood at 5.7 percent.
These numbers contrast with the macro table of the Spanish Government, which estimates a growth of the gross domestic product (GDP) of 6.5 percent this year and 7 percent by 2022. The IMF estimates that the Spanish economy will grow by 5.8 percent.
Perhaps the Executive’s forecasts were more realistic when the budgets were drawn up for the first time, in May, as higher consumer spending, a more powerful reactivation of the economy and a closer end of the pandemic were expected.
Negative implications of the reduction of the forecasts
Now this distancing means less job creation, therefore, less collection of social contributions, a higher unemployment rate and more spending on unemployment insurance. Without forgetting that it also calls into question VAT income and makes it impossible for families to use the savings achieved during the pandemic for consumption, which is key to reactivating the economy.
BBVA Research projects a growth in household consumption in Spain of around 4.5 percent, lower than expected three months earlier, while it estimates that it will accelerate to a range of 5.5 percent to 6.5 percent in 2022.
In addition to uncertainty, there are other factors that prevent consumption from taking off. One of them is inflation, which reduces the purchasing power of households as they have less disposable income.
Other factors that influence this lower consumption is the price of oil, since government estimates estimated $ 60 a barrel of Brent, compared to $ 74 today.
The main problems for the IMF are the uncertainty about the evolution of the pandemic, with the appearance of new variants, as well as supply problems.
Likewise, failing to comply with the general State budgets for 2022 also weighs down the accounts of successive years.
The INE made the hare jump
The loss of traction in the Spanish economy was uncovered by the National Statistics Institute (INE), when it lowered GDP in the second quarter by 1.1 points, from 2.8 percent to 1.7 percent.
And it generated a cascade of downward revisions. The Bank of Spain has been one of the last institutions to do so.
The body led by Pablo Hernádez de Cos cut the GDP growth forecast for 2021 by almost two points, from the 6.3 percent that it projected last September to 4.5 percent.
For next year, the supervisor estimates that GDP will increase by 5.4 percent, five tenths less than what he considered three months ago (5.9 percent), again, in the most pessimistic range.
For its part, the OECD has also cut the forecasts from 6.8 percent to 4.5 percent now. For 2022 the estimates are not much better. The projections are lowered from 6.6 percent to 5.5 percent.
The return to normality of economic activity is delayed
The IMF has also questioned the words of the Minister of Economy and Competitiveness, Nadia Calviño, about the return of activity to pre-pandemic levels. Something fundamental for the evolution of GDP.
Thus, the international body does not believe that it will occur until the end of 2022 or the beginning of 2023, while Calviño dates it at the beginning of next year.