The acceleration of the Spanish economy in the first quarter, with a growth of 0.5% – three-tenths more than the previous one – and an annual growth of 3.8% fuels the government’s optimism in the middle of the election race, once the spirit of the recession. This stronger-than-expected improvement in activity is the second highest in the euro area – after Portugal – and shows firm resistance in a scenario clouded by the entrenchment of the war in Ukraine and global uncertainty. For example, GDP is on the verge of restoring pre-covid-19 levels, although there is no reason to brag about it when our country will be the last in the EU to do so. Its rise, based on export and investment pressures, is even more significant when one takes into account the consumption ballast held back by price increases. The increase in inflation in April to 4.1% – eight tenths more – due to electricity and fuel, which are more expensive than a year ago, is the other side of the coin. While the core index is down nearly a point as the rise in processed foods slows and the overall index is well off the ceiling it hit in June, there’s nothing to suggest the problem will be resolved any time soon. As if they were two parallel trends, the recovery in CPI continues to jeopardize the future of many households and businesses, while driving record tax revenues. To the extent that Finance Minister María Jesús Montero has announced that Spain will be able to reduce the government deficit to 3% in 2024 – as required by the EU reactivated Stability Pact – without imposing restrictions thanks to good behavior of the economy and employment. The rebound in government spending due to a year-long election period will ease the citizens’ constriction with the margin offered by a sharp increase in tax collection without further jeopardizing the deficit and debt. Spain continues to grow despite the worst signs. There is no prospect of him stopping during this exercise and the next two. The electoral impulse must therefore remain with a reasonable management of expectations. Neither today’s governments can simply resort to data of economic calm, nor should aspirants of variety resort to a disturbing picture of the situation.
Source: La Verdad
I am George Kunkel, an author working for Today Times Live. I specialize in opinion pieces and cover stories that are both informative and thought-provoking – helping to shape public discourse on key issues. My work is regularly featured across the network’s many platforms, including print media and social media.
