The latest update of current data from the Ministry of Economy already indicates that the Spanish economy closed the third quarter of the year growing at a rate of 4.6%, well away from the 6.5% that marks the growth objective of the Government’s macro picture for this year and in line with the forecasts that international organizations and analysis institutes have circulated in recent weeks.
The scoreboard just published by the department he directs Nadia Calvin It has come to provide the first signal compatible with the recognition of a context of economic slowdown after weeks of optimistic messages.
Sources from the Ministry of Economy clarify that the data included in their table of indicators reflects the
growth registered in the first three quarters of 2021 compared to the first three quarters of 2020, so it measures the comparison between the worst of the economic blow of the pandemic and the supposedly vigorous recovery of the economy. According to analysts, this growth rate in the third quarter makes it impossible to achieve the government objective.
An outdated forecast
The projections of international organizations and private analysis institutes have long outdated the official forecast, which the Government has flatly refused to change in recent weeks despite the permanent trickle of downward revisions for Spain.
The Government’s account on the matter has moved away from the figures and has focused on the mantra of vigorous economic recovery and favorable expectations for 2022, beyond upward and downward revisions to which the Economy downplays importance. and which he attributes to the context of uncertainty, as Vice President Calviño has emphasized. Along the way, he has also left some sign that he was losing his forecasts for this year. Like when Calviño’s number two recalled that the forecasts are not set in stone, when he was questioned about the impact of the inflationary spiral on GDP.
The inflation has only been one of the factors which has influenced the slowdown of the Spanish economy in the final stretch of the year. Last week the Bank of Spain mentioned other elements such as the lower contribution to the growth of European funds compared to what was expected or a slowdown in private consumption, in the heat of the uncertainty caused in households by the new variant of the virus, Omicron, such as other causes that have hampered the development of the Spanish economy in recent weeks.
With all the fish sold by 2021, the government’s concern is now focused on doing everything possible not to compromise the performance of the economy during 2022 and one of the first objectives is to prevent inflation from generating second-round effects.
The latest CPI data for the month of November already showed how the inflationary spiral has begun to filter into more than half of the headings from which the official price indicator is constructed, with special intensity in fresh foods and certain consumer products typical of these dates.
The economic vice president must have seen the disturbing scenario because she has already slipped the first messages calling for the caution of companies and unions in collective bargaining to prevent what the Government continues to observe as a transitory phenomenon from being consolidated in the economy via wages , as has also been warned from places like the ECB.
The Bank of Spain already warned last week that one of the main risks facing Spanish growth next year is that the inflationary pressure is maintained for longer than expected –They understand that it will be deactivated around the summer– and that leads to a transfer of price pressures to wages, which in their opinion would not only limit the ability of companies to invest but would also compromise growth.