For the Bank of Spain the vigor of the Spanish economy is such that it will be able to bend the accumulation of threats that loom about the economy World Cup for the rebound of inflation, the increasingly high risk of a war … Commercial for the tariff offensive of the Trump administration and the growing global geopolitical tensions. In the midst of this mines field, the institution that since last September directs the former minister José Luis Escrivá not only believes that the Spanish economy will maintain its growth rate with respect to what it foreseen in December but even accelerate it to 2.7%, two tenths above the 2.5% predicted then.
The institution supports its upward review for the best behavior with respect to the plan of Economics of the Bank of Spain, Ángel Gavilán, will provide an extra impulse to growth Not only this year but also in the next exercises on the side of a greater expectation of private consumption.
The Bank of Spain Bank map is based on the fact that the economy is growing above its possibilities or, in technical terms, above its potential growth, that supervisor analysts place in 2%, and that in the coming years It will slow and converge Softly until that level due to the necessary decline of public spending in a context of tax adjustment at European level, for a more stable contribution of tourism (which would already be reaching its limit) and for the lower contribution of the foreign sector. Its projection is that the economy grows 1.9% in 2026 and 1.7% in 2027, the same levels that already foresaw in December.
Change of forecasts
From the Bank of Spain
Change of the Bank of Spain forecasts
The relay will be taken by the consumption of households, for that better evolution to the plan drag effect that European funds Next Generation They have exercised on the investment of companies has been much lower than expected by the Bank of Spain, which was already skeptical with respect to the private investment mobilization figures that the government had transferred. In fact, the supervisor anticipates that Spain will only be able to execute half of the cheap loans to which it is entitled according to the programming of the European recovery mechanism. He explained that this assumption is based on the level of historical execution of European funds in Spain.
Endless threats about growth
This whole scenario is conditioned by what the director of Economics has unusually considered “as the most important part of the entire forecast scenario”: that of the threats to which this scenario is subjected. “When there is a moment of uncertainty, economic activity is not usually resent but after one year it ends up,” explained Ángel Gavilán, who, however, has explained that this potential effect has not been included in the forecasts, due to uncertainty about the magnitude of that impact.
The Bank of Spain has not included in its forecasts or that possible adverse impact on the activity of the context of general uncertainty about the economy, which is considered inexorable but whose magnitude is difficult to advance; nor the tariffs that the United States is expected to impose on European products and the eventual response of the European Union, since its impact depends on the intensity of tariffs, their duration and another series of factors. “There are models that yield a small impact and others that foresee a large impact, but we do not have a clear trial,” he explained.
Nor has the possible fiscal expansion derived from a greater expense in defense been incorporated, which could impact on the levels of deficit of the economy, but which according to the institution would cause a rebound of the activity and also of inflation. The markets have also advanced since it can cause an increase in interest expenditure of countries that must increase their defense expenditure, among which is Spain.
Another flank of uncertainty is how long the Spanish economy can evolve with its back to what is happening in its main export markets, Germany and France, whose economic growth is much more lukewarm, a autonomy that sooner or later could tend to dilute.
The impact of this uncertainty on the growth scenario released on Tuesday by the Bank of Spain is so relevant that the Directorate of Economy has decided to disseminate for the first time an internal survey between the institutions of the institution to show to what extent internally it is considered that this uncertainty can subtract the growth of the Spanish economy. The result is that more than half of bank economists understand that These risks will not yet specify a thrust to the growth of Spanish GDPwhile less than 20% believe they could even provide greater boost to growth.
«There may be abrupt corrections which can affect economic growth and decisions of economic policy! «, has warned the chief analyst of the institution.
#Bank #Spain #rises #growth #predicting #abrupt #corrections
