AIReF gives oxygen to the Government and places GDP at 0.7% in the fourth quarter


The Independent Authority for Fiscal Responsibility (AIReF) was one of the first organizations to warn that Spain could be on the verge of a technical recession, after chaining two consecutive negative quarters, although with a moderate drop in activity -far from the deep crises experienced in the past-. The Bank of Spain also warned about this risk last week that it has come to ask entities to provide “adequately and on time” in case this scenario materialized between the last quarter of this year and the first of next year. For now, the data collected by AIReF in the latest update of its real-time GDP forecast model (MIPred) advance economic growth of 0.7% in the fourth quarter in relation to the third and 2.2% in interannual terms.

These data must be quarantined, since at the moment the supervisory body has little information on the period -in fact, the last two indicators that it incorporates into its forecast are deflated total sales and gross remuneration, also deflated, of large companies. in September-. Despite this, this information points to a Positive inertia facing the final stretch of the year that gives more oxygen to the Governmentmaking the forecast of closing the year with an advance of more than 4.4% included in the macroeconomic picture (the Bank of Spain or the European Commission calculate 4.5%) to be a little closer.

Last week, Brussels ranked Spain as the only one among the large economies in the euro zone that will manage to avoid recession and, in any case, as the most dynamic between now and 2024. The less dependence on Russia, the greater energy diversification and the arrival of the bulk of the ‘Next Generation’ funds, together with inflation that has been contained since the peak reached in July (10.8%) and a labor market that is better resisting the slowdown that in past crises would be behind this evolution more positive.

From now on, everything will depend on whether the situation in Europe does not worsen, especially in the energy field, which would force the European Central Bank to be more aggressive in its monetary policy and would fill the horizon with dark clouds – the euro area and the Union Europe are the main markets for Spain-. From CaixaBank Research they calculate that the rise in interest rates will have its maximum impact in 2023 and will subtract around one point from growth of the Spanish economy. The economists of the first Spanish entity by volume of assets also rule out a technical recession in the country and point rather to a stagnation.

In the preview of the National Accounts data, Statistics already placed GDP at 0.2% between July and September despite the tourist season (the data will be reviewed in December). The economy held up in a very complicated context due to inflation (which reached its maximum annual rate in summer), the energy crisis and the tightening of financial conditions, which had a full impact on the pockets of consumers and on the balance sheets of the companies. Despite this, demand from families increased by 1.1% in the height of the summer season, only one tenth less than in the second quarter of the year. Of course, the rise in prices has already forced many households to have to pull the savings accumulated during the covid pandemic.

Jobs hold up despite stagnating economy

One feature that is making this crisis particular is that, despite the fact that the economy has not yet recovered the level of growth prior to the outbreak of the disease, something that according to the organization led by Pablo Hernández de Cos will not happen before 2024, the number The number of employed persons is increasing above what it did in 2019. María Jesús Fernández, an analyst at Funcas, highlights in the latest blog published by the foundation that, although there are 270,000 more public employees, private employment has also increased a lot , which is also partly due to the emergence of the underground economy.

In the budget plan document sent to Brussels, the government estimated that around 285,000 workers have joined the formal economy since the pandemic. If that figure were discounted, Fernández points out, there would still be an increase in affiliates of more than 270,000, in a context in which there is also a lack of specialized labor both in more qualified sectors and in those that are less. What the experts confirm is that the adjustment, where it is taking place, is fundamentally in the number of hours worked, a change that would have been possible thanks to the labor reform approved by the Executive.


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