• Slowdown.The Government of Sanchez denies the end of the economic cycle marked by all indicators
  • Interview.Daniel Lacalle: "Europe takes the slowdown very seriously, here the Government falls into complacency"

The Government of Pedro Sánchez continues to ignore the economic slowdown. The numerous negative data known in recent weeks show that the cycle is running out, but this reality instead of increasing the caution of the Executive is causing the opposite effect. So much so that the Minister of Finance, María Jesús Montero, made it clear yesterday that the Government will raise the growth forecast for this year "at least" to 2.3% . Of the slowdown in the second quarter, the bad unemployment data of July that makes the number of unemployed still exceed three million, or the fall in the sale of homes, no trace.

The head of the Treasury in charge explained in an interview with Cadena Ser that the current forecast of 2.2% is "prudent", and that organizations such as the Bank of Spain, the International Monetary Fund (IMF) or the Independent Authority of Responsibility Fiscal (AIReF) estimates higher growth for the Spanish economy in 2019. Therefore, the Government will raise "at least" the new official figure to 2.3%, without ruling out that it can go even further as "some agencies reach 2 , 4% » , thus coinciding with the argument already presented by sources of the Ministry of Economy when the bad growth data of the second quarter was known.

Montero, however, made no reference to the slowdown in growth and in the pace of job creation provided by those same organizations. The IMF, for example, estimates that unemployment will only be reduced by one tenth between 2019 and 2020 , so that by the end of next year it will continue to be above 14%. The Bank of Spain, in the macroeconomic forecasts published last June, said that "GDP growth is expected to evolve in a path of gradual slowdown" and affected the fall in domestic demand. And the European Commission estimates that Spain will register next year its lowest growth since the beginning of the recovery.

The only concerns that Montero showed about the evolution of the economy were in a political key, and as an argument for the formation of a new Executive. “ The Government is concerned that the prolongation of a functioning situation causes the expected growth for 2019 and 2020 to slow down . Spain remains a robust country, which grows above the average [in the euro zone] and is creating employment. (...) Of course, political uncertainty affects growth, and that is why the formation of a government is urgent, ”he said.

He also pointed out that there is a need for an Executive with full capacity for action so that communities can receive deliveries on account and VAT settlement. It is about 4,500 and 2,500 million, respectively, that the Autonomous Communities must receive from the Government, but for this it is essential that the Executive ceases to be in office. In this regard, the minister pledged that the delivery of this liquidity will be one of the first measures as soon as a new Government is formed, and that it will be part of a list of priorities in which, obviously, the approval of the General State Budgets (PGE) for 2020.

"My Ministry has the skeleton of how the 2020 budget would behave based on the collection estimate," Montero explained, while being hopeful that the political paralysis will be resolved with the investiture of Pedro Sánchez in September and give time to those PGE are processed .

According to the criteria of The Trust Project

Know more

  • Maria Jesus Montero
  • GDP
  • Pedro Sanchez

Deceleration The Government of Sanchez denies the end of the economic cycle marked by all indicators

Macroeconomics The industry slowdown worries in Spain and extends the pessimism of the recession in Germany

Politics The PSOE sees the pact with Compromís feasible to invest Sanchez and dismisses the PP proposal as a "joke"