Another day I spoke to him about the mess created by the deluge of economic data with which current events overwhelm us every day and how difficult it is to get an accurate picture of the real situation from it. Well, this week was a great example of that. We’ve had employment data, which shows that we lost more than 100,000 jobs in the first quarter, as highlighted by the opposition or, if you prefer, the best quarter in the last 15 years, as the government recalls. We’ve seen growth have been a measly 0.5%, making the promise made on Thursday by Nadia Calviño more difficult to achieve compliance with the stability rule related to the deficit a year earlier. The Vice President insists that the growth of the Spanish economy is solid, but she forgets that we are one of the few countries in the EU that have not yet reached pre-pandemic levels, eliminating us as an example. We’ve also known inflation data. Here, and unlike employment, we are equating ourselves with an advantage over our partners as long as we forget that once the base effect has diminished, inflation has risen again, which is the easing of monetary policy that has brought the clouds to the background has pushed, made it more difficult. interest rates which in turn and all told have reduced the purchasing power of the Spaniards by more than 5%. In short, are we going well or are we going downhill? I don’t know what you decide. For this reason, because it is so difficult to draw sober conclusions from the deluge of data, today I present to you an exercise that I consider to be very healthy. I suggest we pull back a little bit, away from the crazy news and look at things with a little more perspective. What do we see there? Well, if we turn to the report published on January 9 by the research service BBVA, we will see two pieces of data that seem fantastic to me. Between 2008 and today, GDP per capita has grown by only 3.1% cumulatively. While in the same period, social expenditure (calculated as total expenditure minus interest and public investment) will grow by 27.3%. Is that urge healthy? No, it puts us on a collision course for disaster. What does this drift teach us? Well, first, that the allegations against Mariano Rajoy of leading a criminal austerity murder and applying ruthless adjustments were radically false. On the contrary, during his tenure, things followed the previous trend and did not reverse it. For their part, the following have done exactly the same, only at a faster pace and in an even more unscrupulous manner, as the amount of debt grows more unbearable by the day and the persistent deficits reflect the price of the most condescending populism. I am sure that many (almost all) will think that the problems we are currently facing justify any misuse of spending, any worsening deficit and any increase in debt. But few would think that this huge and persistent divergence between growth – terrifying and moribund – and government spending – lavish and wonderful – is still sustainable. Remedy? Let’s continue with the above report: the first challenge is to increase the potential growth rate, which requires raising productivity and employment rates, which are only higher than those of Romania and Greece and sometimes also Italy. The second challenge is to improve the efficiency of public spending. There the program has been expanded. In a non-exhaustive way, the continuous evaluation of spending programs, the digitization of administrative processes and the management of pension expenditure should be mentioned. And the third, designing a tax system that, in addition to collecting capacity, promotes investment, productivity and employment and helps in the decarbonization process of the entire economy. Loves? I love it. We are in the election period, which will last the rest of the year. Do you see the parties engaged in stopping this drift or rather focused on satisfying the voters, with all kinds of promises whose costs have not been calculated or published? Those who support the tripartite government that rules us are second and those who aspire to succeed them should tiptoe over the issue and not make commitments they might (better, very likely) won’t can fulfill.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
