Spain has a two-year period ahead of it that invites optimism, whoever the next tenant of the Moncloa is: the Spanish economy will close this year with an advance of 2.1% and 1.9% the following , according to the forecasts of the Organization for Economic Cooperation and Development (OECD), more than expected.
The body based in Paris yesterday revised the previous calculations upwards, from March. The result is that Spain will do better than its neighbours, Germany, France or Italy. And this year it will run more than the eurozone average (0.9%).
Thus, a certain resilience and strength is perceived despite an uncertain environment. “Amid a challenging environment in the context of Russia’s aggression against Ukraine, the Spanish economy has held up remarkably well,” the report states. Curiously, neither in his detailed study of the country, nor in the subsequent press conference, was any allusion made to the imminent election call, which does not seem to be a factor that affects the diagnosis of the situation economic
How should this data be interpreted? Each has a double reading. This year’s GDP growth is significantly lower than the 5.5% recorded in 2022, but four tenths above the previous forecast. It equals the forecast of the Spanish Government and exceeds by a tenth that of the Bank of Spain.
Regarding the foundations of this growth, the OECD rather mentions exogenous factors, such as public spending (that is, Next Generation funds) or the recovery of tourism, while consumption (domestic demand barely rises by 0 .8%) and private investment still remain stagnant.
Regarding inflation, the organization lowers the average for this year to 3.9%. In this way, the rate in Spain would remain in 2023 well below the euro zone average, estimated at 5.8%.
Even so, despite the fact that the figures indicate that in Spain inflation has remained comparatively under control, it is still surprising (this is indicated by the graphs in the report) that in no major OECD country the profit margins businesses made it grow as much as in Spain (its contribution to annual inflation was 6%), which reopens the debate as to whether companies have taken advantage of the situation to increase income via price increases.
Spain stands out from the others in another respect as well: its inflation rate will remain at 3.9% in 2024 as well: it will be one of the few OECD countries that will not experience a cooling of prices next year .
On the other hand, in some accounting indicators the OECD is even more benevolent than the Executive itself. For example, he points out that the public deficit will drop from 4.8% to 3.5% of GDP this year, four tenths below what the central government estimates.
Even so, the institution’s chief economist, Clare Lombardelli, recommended that “in the future, Spain’s fiscal attitude must change to address the high debt, this is the expectation”. The economist recalled that Spain’s endemic problem is low productivity and added that “fiscal support measures, as in the case of other countries, must be reduced and better targeted”. In other words, not to be indiscriminate, but to be limited to specific groups, especially the most vulnerable.
Finally, a singularity is detected in Spain regarding access to credit. The tightening of monetary policy in the euro zone, which began last year, is weighing on funding conditions and weakening demand for loans more than in any other country among major OECD economies .
In detail, credit to households and businesses decreased by 2.0% and 2.2% year-on-year in April 2023, respectively. The real estate market is cooling, with a slowdown in home sales. Households are very exposed to rising interest rates, given the strong concentration of variable rate mortgages (75% of the stock). “This entails a risk of deterioration for the banks, which requires close vigilance”, warns the study.
