Economic and political uncertainty – not only in Spain – is very high. The government should take it into account. because the 2023 budget already part of optimistic hypotheses that both the Bank of Spain and the Independent Authority for Fiscal Responsibility (Airef) qualify or even correct.
Catastrophism is just as inopportune –we are going to a colossal crisis– as the blind confidence that Spain will continue to grow in 2023. The IMF recently said that the Spanish slowdown would be less than the European one, but the latest data requires the utmost caution. The Government must not feed pessimism, but neither do we close our eyes and open ourselves to measures – theoretically progressive – that harm the economy because then it loses credibility.
Let’s see the reality. in the third trimester employment has continued to be generated and we have the highest figure in the history of affiliates to Social Security, but the rate of increase in employment is slowing down. GDP growth of 0.2% in the quarter it indicates a great deceleration with respect to the 1.5% of the previous one, but it is in line with what has happened in the euro zone, where stagnation was feared. Y that Germany has grown by 0.3% – despite the Russian gas crisis – is positive. But the PMI survey of the industrial sector in October is worrying. In the euro zone, the PMI index for the manufacturing sector has fallen from 48.4 in September to 46.4, when a figure below 50 indicates contraction. Y in Spain it is worse because it has fallen from 49 to 44.7.
Let’s go to inflation. The Spanish figure for October is encouraging, as the CPI has fallen from 9% to 7.3%, while that of the euro zone has risen to 10.7%. Perhaps the Iberian exception has worked and the drop in inflation will reduce the loss of purchasing power. But be careful, the ECB raises rates thinking about the average of the euro, not in Spain, and the rise is already punishing those with variable-rate mortgages. And the US Federal Reserve has just raised its rates again, which will put pressure on the ECB.
Spain must behave, at least from now on, with the utmost caution and not be carried away by two ditties that sound good but They are wrong and untimely. Vice President Yolanda Díaz must think about her electoral campaign, but preach that the cost of dismissal depends on the situation of the person affected (age, family…) instead of the general rule it’s hard to justify. First, because one should not change, and confuse, a recent labor reform that had great consensus (the CEOE supported it) and is giving results. Also, because it would burden companies with extra costs that, in any case, They should be the responsibility of the state. In addition, job creation would be limited and, when hiring, companies could discriminate against workers whose dismissal would be more burdensome. The idea is quite absurd and that at this delicate moment the vice president raises it does not generate confidence. Why is the rest of the government silent? Because you agree with Yolanda Díaz or because you don’t want internal conflicts?
And it is not logical that before serious housing problem the idea continues to be fed that tightening rent control is the panacea. It is not just control – mortgages are more expensive and tourist flats have returned – but the truth is that the cost of renting an apartment It already represents an average of 30% of the salary according to a study by the Idealista portal. But beware, in the capitals where rent control is most insisted on (Barcelona), the cost has already risen to 58%. 22 points more in a year. A scandal!
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Affordable rents require public housing and agreements with the private sector that increase supply, not limitations and controls that tend to reduce it. Attempt make landlords pay for damages of the system does not fix anything, but it messes everything up.
With so much global uncertainty, it is not possible govern as if growth were eternal and invincible the protective State. Although not popular, caution must be exercised against clichés and simple, populist solutions. And if the government ignores it –or only think in electoral terms–, will further complicate a reality that is already very delicate to manage.