Brussels lowers Spain's growth forecast by 16 tenths this year

Drastic slash. The European Commission is going to lower this Thursday the growth estimates for Spain for this year and the next, leaving its forecast at

, 16 and eight tenths less respectively compared to their summer calculations and almost two points less than the 6.5% and 7% that the Government still defends, according to the documents that EL MUNDO has had access to. In recent weeks, various research bodies and services have corrected their estimates, but the European Commission's turnaround is by far the most radical, showing concern for the Spanish economy and the evolution of some indicators.

Community technicians expect growth of 4.4% in 2023 and a

despite the recovery, which which is more than double that of the Eurozone average but is already returning to pre-pandemic levels. Likewise, they expect a deficit and debt well above the permitted thresholds. The Stability Pact is frozen and will not be reactivated until the end of next year, but Brussels expects the Spanish deficit to go from 8.1% this year to 5.2% next year and that it is still in the 4.2% in 2023, when a maximum of 3% should already be aspired. Along these lines, the Commission estimates that

and it will only drop to 116.9% in 2023, practically double that allowed by Maastricht at a key moment for the reform of fiscal rules.

The shock was expected, and the institutions are aware of the precariousness of an analysis of this type in such changing environments, but its depth will hurt a government that struggles to generate trust and sell credibility.

It arrives just hours after the agreement with the European Commission is made public to be eligible for the next disbursements of European funds, associated with the fulfillment of milestones and reforms.

These are legislative issues, but the entire package is supported by a macroeconomic scenario that is now in doubt, due to internal and external issues.

The inevitable downgrade comes at a delicate moment,

between the labor market and the economy as a whole, with the energy crisis underway and with more than justified questions about the Budgets. Especially after the INE has reviewed provisional data and with the feeling that it could happen again. Does it make sense in that context to maintain the 2020 forecast accounts when the growth forecast is so far from what was expected just a few months ago? "We have adopted a prudent attitude when preparing the General State Budgets for 2021 and also for 2022, so that, in fact, the better performance of tax revenues allows us even in a not so positive macroeconomic scenario,to be in line to meet the objective of reducing the public deficit over GDP and public debt over GDP since 2021 and of course also in 2022, "said Calviño this Tuesday in Brussels, preparing the ground for the many questions that were raised. are going to do these days.

The worst contraction in the EU

The document that Commissioner Paolo Gentiloni will present today highlights the "strong recovery" after the "worst contraction in the entire EU in 2020" and the fact that, finally, tourism and the services sector are "supporting the recovery", which which will lead to private consumption being the key factor in the rebound.

. Real GDP would rise to 5.5% this year and 4.4% next year, thanks to the stability provided by vaccines and the relaxation of containment measures. But the report warns that the "persistence" of the virus and the "possible reappearance in other countries may affect growth, notably due to the delay in the total recovery in tourism." On the other hand, the arrival of community funds from the Recovery Plan, which are already flowing and will continue to do so in the coming months, is expected to be a decisive element in consolidating the reactivation. But for that it is vital that many measures are approved, some especially controversial in labor matters. So payouts are not guaranteed no matter what.

The Gentiloni team

, which "have dramatically mitigated job losses and paved the way for a rapid recovery in the labor market." And he applauds that revenues, especially VAT and personal income tax, are helping to control the public deficit, but he continues to warn that the levels are high. "Sustained growth in 2023, as well as control of total current spending, will be key elements for further reduction of the deficit," the papers read. Because if decades of crisis management have taught something, it is that almost all governments promise adjustments on the revenue side, but in the end the most credible ones end up on the expense side, and rarely in a placid way.

If forecasting is usually an ethereal exercise, it becomes even more volatile in a pandemic and during its departure.

, so the numbers need to be quarantined. Thus, at the beginning of July, the Commission increased by three tenths (from 5.9 to 6.2%) the estimate for this year for our country, but lowered by half a point (from 6.8% to 6.3) the 2022. And this after having increased by a point and a half of a blow in May. And now comes the 1.6-point hack.

The services of studies and international organizations go on a different plane than that of the Executive, which continues to maintain at 6.5% for this year and 7% for next year. He set it in April, when he sent the Stability Plan to Brussels, and he did not touch it in October, when he sent the 2022 budget draft to the Commission. Despite inflation, the price of energy or the more than significant downward revision of the INE on the provisional data from the beginning of the course. Funcas recently lowered its estimate by 1.2 points, to 5.1% this year. The Bank of Spain, without getting wet, speaks of a "substantial drop" in its calculations. Airef is 5.5% in 2021 and 6.3% next. And the same goes for BBVA's research service, which has limited its previous calculations by a little more than one point to stay at 5,2% now and 5.5% next year.

, but also the most willing to make major upward revisions if revenue figures turn out to be better than expected.

According to the criteria of The Trust Project

Know more

• GDP

• European Comission

• Spain

• INE

• State's general budgets

• THE WORLD

• Coronavirus

• Personal income tax

• ERTE

Politics Sánchez supports Calviño before Podemos: "There is no interference, there is collaboration, coordination"

Labor reform Garamendi: "The problem in the labor reform is the proposals of two ministers, not if the employers have the right of veto"

Politics The Andalusian Government brings the latest budgets of the 'legislature of change' to Parliament without the support tied

See links of interest

• La Palma volcano

• Last News

• Holidays 2021

• 2022 business calendar

• Home THE WORLD TODAY

• Podcast Economia

• How to do