The Government has been the last to revise downwards its macroeconomic forecast table. And the worst is not this, but that nobody seems to care, because all forecasts are taken today with tweezers. At this point, it is clear to everyone that, with the pandemic subsidence, the war of Putin in Ukraine it has unleashed an upward spiral on prices (inflation) and, in parallel, a setback in the growth figures forecast just six months ago. The OECD, for example, has calculated the impact of the war on the euro zone as a drop of almost a point and a half in GDP growth and an additional rise in inflation of 2 points, depending on how long it lasts.
Taking into consideration the revisions made before, the growth range this year would be between 4.2% (Funcas) and 5.5% (BBVA Research) and will be between 2.9% (Banco de Spain) and 4.9% (BBVA), all pointing to a further slowdown next year. Let us remember that 2021 closed with an official figure of 5.1%. Not bad data, but read ignoring the context (pandemic, new waves, war…), would place us before languid growth, with a high flash of inflation this year that will fall next year according to all experts. Not exactly a stagflation like the pessimists are announcing.
By the way, in the midst of this gibberish, we are overlooking another very relevant piece of information, which says a lot about some of the structural changes that have taken place in our economic model in the last decade: we maintain a surplus in the balance of payments, with a record figure of exports. By the way, the increase experienced by the number of contributors to Social Security (we will exceed 20 million this month, for the first time) and the beginning of the change towards the indefinite, in the new labor hiring, have also passed with a very low profile. Three good news.
Feijóo and his economic plan
Those of us who understand politics as a way of seeking solutions to social problems, solutions found through negotiation, dialogue and agreement among different people, cannot help but congratulate the feijoo who said he came “not to insult, but to win the elections”, although we like the other less feijoothe one who stands on his side (making a Rajoy?) as if the entry of Vox, for the first time, in a PP government in Castilla y León had nothing to do with him, who was only passing by, as an observer.
to that first feijoo We thank you for the Plan of Measures presented, after having set the framework of the debate on two wild-card ideas from the right: the Government “makes a fortune” with inflation and generalized tax cuts, something against which the IMF has positioned itself. The four axes of the Plan hammer on slogans reiterated by the PP every time it has been in the opposition, although it has not always taken them into account when or where it has been in government. But they are familiar to his constituents to whom he tries to restore a comfort with the speech, which they had lost.
With one nuance, no less: compared to the Government’s motto during the pandemic: “leave no one behind”, now it is the right (we also see it in France with Le Pen) who takes up the banner of defending the most disadvantaged, sectors on which he focuses his proposals, notably the two most powerful: deflating the personal income tax rate to the lowest brackets (very different from lowering taxes) and revaluing with the CPI all public aid to the most disadvantaged (minimum income, etc.).
In both, by the way, he has caught the Government with the wrong foot. Because once the Government revalues pensions with the CPI or has lowered taxes on electricity, it loses arguments to oppose, on principle, extending these proposals to other disadvantaged groups. More doubts arise with the proposal to introduce tax incentives in the ‘Next Generation’ programs. From their comments on the price of electricity, only two things are clear to me: that they do not agree with the ecological transition designed by the Government and that they ask to extend the useful life of nuclear power plants. Both ideas that are perfectly debatable and negotiable in a new context like the current one.
In short, the economic plan feijoo He would have deserved a longer negotiating journey between the government and the opposition than, I fear, they are going to have. Because it would help the citizens and, also, to relax the political climate of the country.
The usefulness of the Iberian exception
With a year of delay and thanks to the fact that the President took the reins of the negotiation, we have learned this week the usefulness of that political battle in the European Council to force the recognition of an “Iberian island” in the European electricity market as a first step essential to negotiate a temporary exception for Spain and Portugal with respect to the common rules of the single energy market. That first response from the Government at the beginning of the spectacular rise in the price of electricity in the sense that “this is the market” and “nothing can be done”, fortunately was amended by the President himself.
The agreement reached this week with the Commission on an average cap of 50 euros/MWh on the price of gas for 12 months is very positive news that will allow the consumer price of electricity to be lowered, although there are still many technical fringes to be clarified . It is also positive that it has been approved with the frontal, public and radical opposition of the oligopolistic companies in the sector that have suffered a severe defeat, perhaps unnecessary if both parties had agreed to negotiate how to reduce the excess profits that they are obtaining with a market whose marginal rules remain the same, despite the emergence of renewables with zero marginal cost. There are plenty of egos. And energy policy is no longer dictated by energy companies.
Related news
We will see the transfer of the European agreement to our BOE and, above all, how the difference between capped gas that sets a price for the market and what is really charged by the companies that use it to generate electricity and that buy it at an international price is financed. , today much higher, although it will be difficult not to apportion it among consumers through the rate.
As you can see, the situation is so fluid that new elements are constantly entering or leaving that change the course of events. This requires a flexibility and fine-grained analysis to adapt the surfboard to the wave that is sometimes hard to see in our political class. Now, for example, many things depend on the length and extent of the war of Putin. We will see.