The macro picture estimates that the rebound next year will be 7.2%, a figure that Calviño says could touch 10% if European plans are taken into account. These same aid are the ones that allow the total spending limit to reach 196,097 million
The Government will shoot the total spending ceiling for 2021 to 196,097 million, which will be the highest figure ever recorded in the country and a spectacular increase of 53% compared to last year. And it will do so a year after the economy has suffered its greatest collapse in peacetime and which, according to official estimates that have also been published today, will rise to 11.2% . Two milestones that will go down in the economic and social history books of the country and that are directly marked by the coronavirus pandemic.
The new economic forecasts prepared by the Ministry of the Economy significantly worsen those sent to Brussels last May. The worst evolution of the health crisis and the serious economic problems have caused the official figure to go from 9.2% to 11.2%. For next year, the upturn in the macroeconomic chart is 7.2% , which shows that the recovery will be significantly more moderate than the collapse.
The Vice President of Economic Affairs, Nadia Calviño, however, wanted to convey that the evolution will be better than indicated in the table since the one published this Tuesday is an “inertial scenario”, in which the positive effects of the plans are not included European aid. Adding this effect, the growth of the Gross Domestic Product (GDP) could touch 10%. “We expect strong growth in 2021 which can be given an additional boost if as a country we take advantage of community funds” and which will allow, according to Calviño, ” the economy to recover in 2022 to the levels prior to the outbreak of the pandemic .” However, the Government itself recognizes that if it did not do so, the recovery would be delayed, at least, until 2023.
Calviño has also wanted to convey that official estimates are “in line” with those offered by international organizations. But if the comparison is made with the Funcas panel, which includes the forecasts of 20 institutions and banking entities, what is confirmed is optimism on the part of the Executive. Likewise, if you go to the Bank of Spain, the body led by Pablo Hernández de Cos projected a second scenario in September, with a fall of 12.6% for this year, which would materialize in the event of a “more unfavorable epidemiological situation” . This is precisely the situation the country is experiencing in recent weeks.
And if the review of the macro chart published today by the Independent Authority for Fiscal Responsibility (AIReF) is taken into account, what is observed is that the projected rate of recovery is optimistic, and that it is only achievable if “favorable circumstances converge” , to which they add that there is a real risk that “less benign scenarios will materialize . “
In addition, the so-called deficit reference rate will be -11.7% , a figure also higher than the previously estimated, while for next year the estimated figure is -7.7%. These data do not imply deficit targets, since when the fiscal rules are suspended, the administrations do not have the obligation to comply. But it does suppose a reference for the elaboration of the public accounts and to know the magnitude of the budgetary gaps. The dark, very negative and alarming macroeconomic picture is completed with an unemployment forecast of 17.1% for this year that will barely be reduced by two tenths in 2021 and a record of public debt of 118% of GDP, which represents a increase of more than 20 points in just one year.
For its part, setting the spending ceiling is an essential step in the process of preparing the General State Budgets (PGE); It is defined, according to the Independent Authority for Fiscal Responsibility (AIReF) as the budget management instrument through which, once the income for the year has been estimated, the budgetary expenditure that allows the fulfillment of the stability objective is calculated; and the “notable” increase, as pointed out by the Minister of Finance, María Jesús Montero, is based on the funds that Spain will receive from Brussels within the economic reconstruction plan.
The homogeneous spending limit will be 136,779 million euros, which represents an increase of 7.2% compared to this year. However, if extraordinary transfers to communities and Social Security are added, the figure exceeds 168,000 million, 32% more. And to all this we must add European funds, so that the aforementioned 196,097 million will be reached, 53% more and which is what the Government has called the total spending limit .