Complex start to the year marks the gap in government and organizations forecasts


Economists postpone economic start until spring, but executive believes European funds will increase GDP from January

Analysts disagree with the calculation of GDP growth made by the government in its project of the General State Budget (PGE) for 2023. Coincidentally, the presentation of the government accounts coincides with the publication of the forecasts of the main economic body in the country: the Bank of Spain, which has also “supported” its BBVA Research estimates, which presented its 2023 data this Thursday. They are not alone: ​​the Tax and Customs Administration (Airef) also predicts growth in 2023 of 1.5%, six-tenths below the Executive’s estimate.

Specifically, the government has based its accounts on gross domestic product (GDP) growth for 2023 of 2.1%, much lower than the 4.4% previously forecast, but well above analysts. For its part, the Bank of Spain calculates that the country will advance only 1.4%, while BBVA Research leaves it at 1%. These are 8,000 to 13,000 million less than the growth, a not insignificant amount that can be compared with the item allocated to Infrastructure and Education together in the PGE.

What is the reason for this big difference? There are several elements such as the evolution of private consumption or exports that permeate the different composition organizations make of GDP in 2023, but the key will mainly be at the beginning of the year. Sources from the Ministry of Economic Affairs acknowledge to this newspaper that the good progress of the first quarter is essential to estimate a growth of 2.1% for 2023.

Ángel Gavilán, director of statistics at the Bank of Spain, explained during the presentation of his report that the economy will continue to “slow down” until the spring of 2023, when economic activity regains “increasing vigor”. . According to this calculation, the recovery of pre-pandemic GDP levels will be postponed to the first quarter of 2024, the year in which the economy will grow by 2.9% according to the regulator. In the eurozone, however, GDP levels in the second quarter of this year were already nearly two points above pre-pandemic levels.

But from the Executive, they explain that the economy will follow a more “cyclical” path from now on and the first quarter of the year will already be positive. This thesis is based on the contribution of European funds to the economy. And it is that they believe the government is making good progress and the implementation of the transformation plans for the Spanish economy will boost GDP. “Cruise speed”, the economic vice president, Nadia Calviño, has already appreciated more than once.

Professor of Economics and Finance at Esade, Omar Rachedi, explains to this newspaper that while the high degree of uncertainty in the economy next year must be taken into account, the difference between the forecasts is around 10,000 million euros, which would mean that the government debt ratio from 118.3% to 119%. “This at a time of rising interest rates could pose a sustainability problem,” says the expert, who at the same time indicates that the European Central Bank (ECB) will be the key, which can increase the purchase of Spanish bonds and thus the purchase of Spanish bonds. can reduce. the cost of debt.

But the government entrusts the good progress made at the beginning of the year to the Recovery Plan, which, according to the figures included in the PGE project, will contribute 2.8 points to GDP in 2023, amounting to 25,156 million euros. According to the experts, the question is whether all the resources made available by Brussels will materialize in concrete projects that have been implemented. Until last August, Spain had received 31,000 million euros after meeting 92 targets out of a total of 416, which corresponds to almost 25% of the recovery plan.

The Minister of Finance, María Jesús Montero, explained last Thursday during the presentation of the PGE project in Congress that the implementation of the funds is being carried out at a “good pace”, despite criticism from some organizations such as the Bank of Spain. According to the latest figures, EUR 18,920 million had been transferred to the autonomous communities at the end of September.

The current implementation rate of projects through European funds is around 2,000 million euros per month and sources from the Ministry of Economy explain that this is the speed at which the government has calculated the contribution of these funds to the Spanish economy in 2023. 2,000 million for twelve months represents a contribution of about 24,000 million euros, an amount very close to the 25,156 million they budgeted in their public accounts presented this week.

But the Bank of Spain is not so optimistic about this rate. Gavilán warned that the funds are being developed “late” to what they themselves predicted in their previous June report, in which they estimated the funds reaching the economy this year would be 20,000, but now they are projecting them at 12,000. Gavilán acknowledged that since the implementation periods are “limited” until the end of 2023, it would be useful to “lighten” the management of these funds.

Source: La Verdad


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