Our country leads the records of destruction of GDP, more deficit and unemployment during the next triennium, but they do not take into account the updated data for the third quarter, better than expected
Despite the good growth data for the third quarter, and without being clear about what will happen in the last weeks of the year, the European Commission sees the end of 2020 for Spain very black. According to its latest macroeconomic forecasts, those for Autumn, published this Thursday, the Spanish economy will contract by 12.4% in 2020 , the worst figure for the entire continent and a downward correction of one and a half points compared to the -10.9% of the summer estimates.
The outlook is bleak . Community technicians foresee a contraction of 7.4% for the EU as a whole and 7.8% for the Eurozone, but the Spanish data not only exceeds the average by five points, but is also 2.5 points worse than the next, that of Italy, whose fall is estimated at around 9.9% of GDP and whose negative trend has been reversed. Always according to these calculations, Germany would contract 'barely' 5.6% in 2020, while France would do so by 9.4%. All the countries of the continent are in the red , although some, such as Ireland (-2.3%) or Lithuania (-2.2) are weathering the situation more than well.
The 2020 problem carries over to the next fiscal year in a different way. Thus, if Spain grew by 5.4% as Brussels estimates (in summer it expected 7.1%), it would not have enough to recover what it lost, but this time its rate would be much more remarkable than that of almost all its partners. The EU average for 2021, according to the Autumn Forecasts, would remain at 3.3%, and in the Eurozone at 4.2%. And only France, with 5.8%, would grow more than the Spanish GDP. And the same in 2022, since the Commission estimates that Spain would be able to maintain the rhythm and with 4.8% it would once again be the community 'locomotive', only behind Malta.
“The Covid-19 pandemic and the strict lockdown measures put in place in Spain to contain it have caused an unprecedented recession. Measures to limit job losses and support the business sector have cushioned the impact. It is forecast that Output will recover strongly in the second half of the year, but the recovery will be uneven across all sectors and the significant increase in the unemployment rate this year will only partially reverse over the next two years . The economic recession is expected to the balance of public administrations worsens, which will gradually decrease from 2021, “says the brief analysis published this Thursday.
The Commission's figures are in any case far from the estimates of Moncloa and the Ministry of the Economy, which a few weeks ago when the spending ceiling was presented, they expected a fall of 11.2% and a rise of 7.2% in 2021 And they are more in line with those of the Bank of Spain or those of the IMF, which foresees a hit of 11.8% this year.
The explanation, according to the Ministry of Economy, is that the cut-off date used by European officials for these calculations, October 22, implies that the final data for the third quarter of our economy was not taken into account, which was much better. than expected in Brussels and by the consensus of analysts. The 16.7% registered between June and September exceeded by up to two and a half points what the experts considered, which could explain a good part or almost all of the distance that is found between the models of one and the other.
“The forecasts of international organizations are useful from the point of view of comparison between countries, but individually they are not so interesting or so useful,” said the Minister of Inclusion, Social Security and Migration, José Luis Escrivá this morning . As indicated in statements collected by Europa Press, the EU forecasts “have become outdated” by not collecting data from the Labor Force Survey (EPA) and GDP for the third quarter, much better than expected.
The Brussels estimates do not take other elements into account either. “The Spanish authorities have announced that the main elements of the policy package for 2021 will be financed by the mechanism for resilience recovery [European funds]. The Commission's forecast does not incorporate such a potentially significant positive impact on economic growth in 2021 and further. According to government estimates, based on a complete and rapid absorption of funds and high multipliers, it would increase real GDP growth by approximately 2.5 percentage points, “the analysis reads. But in Brussels they are skeptical about the ability of our country to complete this total absorption of such a large flow of community resources.
Deficit and debt
The autumn forecasts also address parameters such as deficit and debt . If attempts to anticipate the growth of the economy have to have a much larger margin of error than usual, what can we say about the balance sheets of public accounts when the Commission or the Eurogroup itself, again this week, continue to invite the countries to do whatever is necessary at the national level and remember that at least until the end of 2021 there will be no more talk about the Stability Pact and the need to start fiscal consolidations.
In any case, the Spanish deficit would close 2020 at 12.2%, once again the highest figure in Europe, even ahead of Greece and almost 50% higher than the Eurozone average (8.8%). And it would remain at the top of the ranking also in 2021 (9.6% of GDP) and 2022 (8.6).
Public debt would skyrocket to 120.3% of GDP this year (only behind Greece, Italy and Portugal), would rise to 122 next year and would continue to grow to 123.9% in 2022, 20 points per above the Eurozone average in all cases.
There is no good news for employment either. This year Greece would close with the worst records on the continent, 18%, but Spain would occupy second place with an unbearable rate of 16.7%, double the average of its euro partners. And unlike them, the figure does not drop but would increase in 2021 and 2022 to touch 18%, being once again the worst economy on the continent in terms of employment.