Submerged in the thick fog of an eternal electoral contest, the debate inevitably revolves around the very immediate economic prospects. And, as far as they are concerned, those of the spring of the European Commission for the years 2023 and 2024 have been better than expected a few months ago. Let us congratulate ourselves on it.
But be careful: these relatively buoyant trees are preventing us from seeing the forest that will have to be crossed in a short time. For this reason, and of all the aspects dealt with by the European Commission, the most interesting are those relating to the public deficit and debt: they are the ones that best shed light on the long term.
Regarding the deficit, things have gone well: in 2022, the progress of activity and prices have pushed the taxation and, despite the increase in spending, it has been reduced to 4.8% of GDP; a decline that should continue modestly in 2023 (up to -4%) and 2024 (up to -3.3%). For its part, the debt also points to only slight falls: up to 111% and 109% of GDP in 2023 and 2024, very high records, close to 25 points of GDP above the euro area average and almost doubling to German debt.
In these two areas, the medium-term prospects are not good: the IMF (Fiscal Monitor 2023) expects that, in its 2028 horizon, there will be hardly any improvements in deficit or debt. And extending the focus to 2050, the sustainability of Spanish public debt, directly affected by ageing, becomes more problematic. And the debt rating agencies take note of this (Moody’s, S
In this longer horizon, the latest Aging Report from the Commission presents a depressing panorama for Spain: between 2019 and 2050, a very notable increase in the weight of those aged 65 and over (from 20% to 33% of the population) and, in particular, those aged 80 and over (from 6% to 12%).
Pensions, healthcare and dependency are certainly a formidable challenge. And although if growth is strong it absorbs everything, the truth is that that of Spain in the long term does not seem to exceed an insufficient 1.5% per year. Which, in addition, hides a modest advance in labor productivity: the Commission expects increases in this for 2023 and 2024 not far from the squalid 0.6% prior to the financial crisis.
Let us rejoice at the economic improvement. But we should worry less about the day-to-day, and more about what would have to be done to anticipate tomorrow. Because it will be then that the low growth of productivity will emerge with force: without its strong increase, everything will be much more difficult.