there is certain panic about the future and the IMF has chosen to justify not the panic, but if the fear. He predicts that in 2023 the economy will experience “one of its darkest moments & rdquor; and cut its global growth forecast to 2.7%. Thus, except for 2009 (the one with the great crisis) and 2020 (the pandemic), it would be the worst year of the century. But the most serious thing is that the IMF confesses that things can go even worse and world growth will not reach 2%, or even 1%.
The causes are the ukrainian war who has shot the price of gas and many subjects high inflation that forces central banks to tighten their monetary policy to avoid an inflationary spiral and that China, which until recently grew by 9% and was an engine of the world economy, is now doing so at 3 and 4%.
And contrary to what one might think, the advanced economies, the richest, will not be the ones that suffer the most, but they will be the ones that will grow the least. On average, 1%; and the euro zone will be almost stagnant by doing only 0.5%. Germany and Italy, which depend more on Russian gas, will have negative growth (-0.3 and -0.2) while France (0.7%) and Spain (1.2%) will grow more. The IMF does not condemn us to hell. This year Spain will have grown more than the euro zone and in 2023 we will be the developed economy that – after Canada – will do so the most.
But let’s not stick our necks out because one of the reasons is that -perhaps due to the weight of tourism- we have not yet recovered the GDP before the pandemic. Furthermore, we are immersed in a high political polarization what is leading us to a dangerous auction of impossible promises. Calviño has lowered his growth forecast, on which the State’s income depends, but his 2.1% is still well above the 1.2% forecast by the IMF.
What does this imply? We are not facing a fraudulent budget, as Feijóo has exaggerated; but if Calviño is wrong (it would not be the first time), the public deficit will be much higher than expected, which is much more serious in 2023, when interest rates rise, than in 2020 when they were rock bottom.
In fact, the IMF does not believe that our deficit is below 3% of GDP, which due to our very high public debt (113% of GDP) would be a minimum standard of prudence, in any year of its projections. In 2027 we would still be at 4.3%.
Certain, the IMF raises the growth forecast and lowers the inflation forecast for 2024 and 2025, but we will continue to be the country with the most unemployment in Europe (12.3%) because job creation in recent years will slow down.
And with the expected evolution of the deficit the policy advocated by the PP of general tax reduction (without specifying spending cuts) seems risky. The IMF expressly says: “the recipe is fiscal responsibility, no tax cuts or general aid (here Calviño also sins), and I support only the most vulnerable & rdquor ;.
The economy should be managed with more sense of State, but that would require certain consensus (also between the two major parties) that would make possible an income pact that everyone demands, but that is complicated in some curious situations in which we live. Salaries in agreements – those of active workers – are growing somewhat below 3%, for civil servants a 3.5% has just been agreed with the unions and pensions will grow the same as the CPI, 8%. These are things that in difficult times -such as those pointed out by the IMF- will generate thorny political and budgetary problems.
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The IMF says that in 2023 we will grow little, but somewhat more than the euro average, which in the face of a very uncertain future should encourage us to achieve a less tense climate in the economic debate. But we are not going in that direction. Yes, Sánchez and Calviño seem to be able to approve a budget, but weighed down by excessive optimism for electoral reasons.
And in Catalonia the situation could be even worse because we have just witnessed a serious crisis in the Government whose first consequence has been that the budgets are in the eaves and we could go to a shameful budget extension. Jordi Turull said it -I think with another intention-, we can’t go on like this.