It is starting to be plausible that we will stabilize in a scenario of low economic growth, high unemployment and high inflation (inflation), such as the rise in oil prices in 1973 and 1979, although this is perhaps worse for two reasons. Will happen. , first, because then we came from a longer and longer period of evolution and now we come from two recessions, Second, because . before the levels public debt They were very low and now they are very high.
Economists see it this way Lorenzo Bernaldo de Queiros, your advisor, freemarket corporate intelligencehas produced a detailed report that paints a worrying panorama for Spain.
The current situation affects any country, and everyone is taking their own measures, but it is clear that some are better prepared than others. Spanish economy It will be the latest in the EU to return to its pre-pandemic levels. This falls to a much lower level than government and analysts forecast and loses per capita GDP relative to the richest countries in our environment.
Spain’s GDP growth itself has been underpinned, and it does not appear that the 4.3% that the government is now projecting will be reached. Quirós believes that 2022 will close between 2.5% and 3.5%: «If gas prices rise in the period before the Russo-Ukrainian war, a sharp increase in energy costs for companies and a sensitive to inflation. While there was an increase in income that had negatively impacted households’ incomes, conflict has exacerbated and intensified these adverse dynamics,” the report says. This inevitably leads to a substantial investment slowdown and personal consumption This makes GDP growth forecast very difficult to achieve during the entire year and hence, despite the recent downward revision by the government,” he added.
Interest rate hike in July will cause serious problems for us
Spain is in a very vulnerable position due to the abandonment of debt purchases and the rise in interest rates. European Central Bank The plan is for the end of this second quarter. Its debt of around 118% and structural deficit of ₹50,000 million per annum leaves us in a very vulnerable position before investors who will ask us for higher interest rates because of our greater risk.
Beyond the required cost to our public finances, we Spaniards will notice an increase in rates for a variety of reasons: ” mortgage They will become more expensive, and more than half of households will have them at variable rates; Financing available for companies It will be more expensive, and banks will be more restrictive in their credit proposition; homes and businesses have one high debt, las Expectations The economic situation has deteriorated significantly and will show no signs of improvement in the short-medium term,” indicates the report.
Quirós and his team see that, “with an economy with a clear recession, with a market for which” labor counter reform made it even more stringent with total or partial indexing of Salary with the persistence of the IPC and some high energy cost It is unimaginable that there would be no rise in unemployment Or a reduction in hiring,” they indicate.
It is expected that the government will maintain ERTE and cessation of self-employment activity to maintain statistical unemployment at the level of real unemployment, but “this situation cannot be sustained, and its budgetary costs will be increasingly difficult.” “
Quirós and his team consider the new fixed-discontinuous contracts a «legal craft»: those who have stop going to work, but are not recorded as unemployed. He estimates that companies will adjust the templates when the ERTE period ends: «The government is using statistical engineering to present unemployment-employment figures that do not correspond to reality. the way he is embodied by the development of number of hours workedwhich levels. lies on less than pre-pandemic,
wrong move by the government
The Advisor is of the view that government measures are not sufficient to mitigate the impact of rising energy prices on economic activity: “The impact on the business fabric is minimal at all and, with all the initiatives taken by the executive Like, to increase. public spending,
nor do they seem to fit price interference: «(…) The effect of the expected fall on the CPI and on the domestic budget cap on energy prices taken up by the government not likely to be The necessary timetable for its approval was given by the European authorities».
As for European funds, they lament their stagnation: “The private sector does not participate in this process. ambiguity too high, and the real risk is too high that aid will be partly unspent and partly earmarked for funding inefficient projects”.
Spain headed for a worse economic scenario than the 1973 crisis