Brussels lowers Spanish growth to 4% this year, three tenths less than the Government

The European Commission has lowered this Monday the growth forecasts for the Spanish economy to

.

After the Russian invasion, the energy tensions, with the price of gas skyrocketing and after the drastic revision made by the Spanish Executive itself, Brussels has cooled down its calculations by more than one and a half points compared to the month of February for this course, and a additional point in 2023, being somewhat less optimistic than Moncloa.

All in all, our country will be one of the countries with the best performance in the entire Union, after Ireland and Portugal, thanks in part to the fact that the drop in previous years (10.8% in 2020) had not been recovered in its entirety.

Community technicians expect

respectively, practically double the EU average and only behind Greece, but the best data since 2008. They calculate inflation at 6.3% for this year (totally in line with the Eurozone average) but a drop to 1.8% next year.

And a

in 2023, well above what Moncloa has promised.

In the macro table sent to the institutions just two weeks ago, the Treasury foresees a path with a deficit of 3.9% in 2023, 3.3% in 2024 and 2.9% in 2025.

The difference for this year is almost one point, since Spain is confident that both growth and collection will be much better.

Community experts speak in fact of this income, but point to a potentially destabilizing factor: the revaluation of pensions.

"In 2023, the public deficit is expected to continue to decline (4.4% of GDP), reflecting dynamic economic growth and moderation in spending that offset the gradual return of revenues to their traditional elasticities. However, the indexation of pensions may generate higher than expected spending if inflationary pressures persist," the document says aseptically.

"Economic recovery is expected to continue in Spain despite the disruptions created by the war against Ukraine. Investments under European funds and the recovery of the tourism sector should underpin growth over the forecast horizon

and average 6.3% in 2022. The labor market is expected to remain strong, with the unemployment rate at its lowest level since 2008, and the government balance general improvement, helped by strong income", says the report on our country in general terms.

The Stability and Growth Pact sets a maximum deficit of 3%, but right now the fiscal rules in the EU are frozen and it is not clear when they will be reactivated again.

It was expected at the end of this year, but after the Russian invasion there is an open debate.

Our country would not return to the accepted thresholds until 2025, but it is not clear when the commission could open an excessive deficit procedure, if at all.

In November, in the winter estimates, the technical services expected that Spain would close 2021 with a GDP increase of 4.6%, that it would improve an additional 5.5% this year and maintain a good pace in 2023, around 4 ,4%.

In February, with the war about to start, they raised the closing estimate for last year to 5% and even raised one tenth, to 5.6%, that of 2022, leaving that of 2023 at the same 4.4% .

But today, in line with the entire EU, after three months of invasion and with an energy crisis underway, the hack has been widespread.

Commissioner Paolo Gentiloni's team has lowered the expected GDP growth to 2.7% this year and 2.3% next year across the EU, and expects inflation to close the year at 6.1%, if Well, he trusts that in 2023 it will fall to 2.7%, high levels for those seen in the last decade, but much more controlled.

At the end of April, in the Stability Program sent to Brussels, the Spanish Government had already carried out one of the most notable correction exercises in recent times, sinking its growth forecasts by almost three points, to 4.3%.

That the European Commission was going to do the same was clear.

Spain suffers like everyone else, however it is

, since it does not expect to have the levels prior to the pandemic until the first half of next year, when most of the partners are already there.

The same goes for debt.

Brussels expects a reduction of three points compared to 2021, but according to the estimated path, the course will end with 115.1% of GDP, to drop to 113.7% in 2023. They are extremely high levels, almost double what is stipulated by the Stability Pact, but light years away from 185% of GDP in Greece or 147.9% in Italy.

Portugal is the only other country that is ahead of ours, with France or Belgium below 115%, but close.

Optimism about tourism, but doubts about inflation

"The Spanish economy maintained momentum at the beginning of 2022, but supply disruptions and escalating inflationary pressures in the context of the war have slowed economic activity since the end of February. As a result, real GDP grew by 0, 3% quarter-on-quarter in the first quarter compared to 2.2% in the previous year quarter, held back by the sharp contraction in private consumption

due to the persistence of obstacles to growth," says the EU analysis.

In its report, the Commission emphasizes that the reactivation of tourist activity has been the main engine of economic growth since the summer of 2021 and is expected to maintain its momentum in 2022. Likewise, it trusts that economic growth will accelerate from third quarter of 2022 thanks to the "faster implementation of investments under the Community Recovery Plan and some reactivation of private consumption", something "supported by the strength of the labor market and the savings accumulated during the pandemic", which at some point should be turned into investment.

However, the technicians warn, "it is expected that

.

Private consumption is projected to remain below its pre-pandemic level over the forecast horizon," that is, until at least 2024.

Our country is exposed like all the others to the effects of war,

in the global production chain, the closure of Chinese ports due to Covid or energy problems, but energy prices in Spain have increased faster than in most eurozone countries.

"A further rise in prices may especially affect activity in

.

In consumption and investment, decisions could be postponed until the current disruptions wear off and private consumption could be further affected by the persistent impact of inflation on the purchasing power of households, particularly those at the bottom of the income bracket. distribution", says the document published this Monday. On the positive side, Spain is the country that is most advanced in the request and distribution of European funds, so the effects should be noticed before the rest of the continent, promoting more investment and cascading effects in some sectors.

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