A higher unemployment rate and a greater deficit deviation . This is what the Bank of Spain foresees, which today has reviewed and, in an important part of the indicators, worsened the economic projections it made just three months ago.

Specifically, and as far as the budgetary deviation is concerned, the agency led by Pablo Hernández de Cos points out that "in comparison with the projections of three months ago, the current forecasts entail an upward revision of the public deficit of 0.1 points percentages in 2019, as a result of the incorporation of the most recent information available, and an additional 0.2 in 2020 and 2021 ".

This means that the deficit will be 2.5% this year, 2.1% next year and will continue at 1.8% in 2020. The data may seem not very high, especially when compared with those of the worst years. of the crisis, but it is enough to contextualize them with those that the Government of Sanchez ambitions to verify that they are very far from these self-imposed objectives. Thus, in the Budget Plan sent to Brussels in October, the Executive notes that realistic objectives would be to reduce to 1.8% this year, 1.1% by 2020 and 0.4% in 2021, something that seems impossible under of the forecasts of the Bank of Spain .

The Bank of Spain points out that the worst forecasts regarding the deficit are due, "to a large extent, because the fiscal assumptions on which these projections rest incorporate a review of the assumption about the revaluation of pensions ." That is, that the Bank "assumes an increase in pensions in line with the CPI for the period 2020-2022, compared to the revaluation of 0.25% - resulting from the application of the formula established in the law of 2013- which was assumed in the September projection exercise. "

And also, and very relevant, that the slight improvement in the deviation "would rest exclusively on the favorable effects of the economic cycle and on the continuation of the process of reduction of the average cost of debt, as a consequence of the current context of reduced interest rates" , and not in measures implemented by the Government to achieve this objective, something that the Economy Minister, Nadia Calviño, and the Treasury Manager, María Jesús Montero, always maintain.

The strike stagnates

The unemployment rate, on the other hand, will also remain very far from the figures that the Government promises to reach and, in fact, the reduction in the coming years will be very limited . Thus, the regulator estimates that the unemployment rate will remain above 14% at the end of the year and that in 2021 it would still exceed 13%. The Executive, on the other hand, estimates that next year the figure will be reduced to 12.3%, a situation that the Bank of Spain does not even contemplate for 2022.

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  • Maria Jesus Montero
  • Nadia Calviño
  • minimum salary
  • Public deficit
  • Macroeconomy

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