Happy and prosperous? new year I Understand + economic forecasts

Year 2022 It is just around the corner. About to close to 2021, year two of the pandemic, It is a good time to forecast what the new year will bring us. However, there is so much uncertainty and the stage tan changing that it is difficult to make predictions. Pedro Aznar, teacher of Esade-URL, Y Joan Miquel Piqué, from EADA Business School, dare to draw some brush strokes.

Just a few days ago, his own Bank of Spain I checked lower your forecasts, confirming a slight puncture in the evolution of the activity of this year and of the next. The Bank of Spain now estimates that the Spanish economy will grow next year by 5,4% (the previous forecast was 5.9%), although it does improve by almost two points their perspectives 2023, with an estimated growth of 3.9%.

The supply crisis, the rising cost of Energy, the inflation, the new one virus surge and the delay in the investments of the Recovery Plan are the other factors that weigh on the current perspectives of the Bank of Spain. These factors translate into the economy in the form of lower private consumption, mayor Cup of saving Y deterioration of productive sectors such as industry and the sightseeing international. To give just one example, the high prices of the Energy will subtract half a point to GDP in 2021 and one point to 2022, according to the General Director of Economics and Statistics of the Bank of Spain, Oscar Arce.

The January slope and prospects for 2022

Pedro Aznar. Professor of Economics, Finance and Accounting at Esade-URL

If one word had to be chosen to define the current economic environment, it would be uncertainty, an uncertainty that has to do with the evolution this pandemic that has conditioned us so much, but also with a behaviour of the economic indicators which is putting economists and business experts in serious trouble to try to explain what is happening and what will happen in the next year. Thus, the GDP growth show a less dynamism than expected, a few weeks ago the OECD announced that its growth forecast for 2022 went from 6.6% to 5,5%, under of the forecast used by the Government to prepare the budget and that may involve a lower collection and problems in balancing the accounts, that is, in reducing the public deficit. On the other hand, the most optimistic watch with hope the employment data, with growth record in november and the affiliation to Social Security is close to 20 million contributors.

How will the January cost? The first element that hinders any effort to estimate the forecast is the evolution of the pandemic. In Europe, important measures to contain the virus, with Austria in the lead, and with a very interesting debate on the mandatory nature of the vaccination. In Spain, and the average number of infections for seven days stood at 7,193 cases on November 15, a month later it had climbed to 26,136 cases, confirming a new wave.

For the Spanish economy, so dependent on tourism, the new variants of the virus are bad news

For an economy like the Spanish one, so dependent on tourism, the appearance of virus variants and the generalization of restrictions that discourage Europeans from wanting to take the risk of traveling is a bad news. The campaign of summer 2022 will be essential for a sector that before the pandemic was the 14% of PIB.

Inflation affects families and threatens the competitiveness of companies

In general terms, the most important component to explain economic growth is the consumption evolution, which is showing a dynamism worse than expected, with a clear culprit, the inflation. The latest data published for the interannual CPI in November shows an inflation of 5.6% in year-on-year terms; you have to go back to period prior to the euro to find similar values. Inflation forces families to spend more on goods that are essential, such as Energy and the electricity, reducing the purchasing power of the rest of goods and services; furthermore, it supposes a threat to the competitiveness of companies Spanish women, who see how their costs grow at rates higher than those of close competitors. It is debated whether this inflation is temporary or more permanent; although there are elements of a transitory nature, especially in the case of energy or the costs of Marine transport, yes it seems that in terms of inflation, a cycle change begins.

Pressure from Europe for Spain to control its public accounts is imminent

Beyond the problems that inflation generates for consumers and families with lower income levels, also has an impact on macroeconomic terms. Higher inflation calls for Central Banks to raise interest rates and with it try to stabilize prices. USA this has already started expansive path and I have no doubt that sooner or later the European Central Bank will follow. A rise in interest rates increases the cost of debt, also of the public debt. For the Spanish economy, the two crises, 2008 and the pandemic, have led to the public debt over GDP from 40% to close to 120%, tripling in a few years its value. The Pressure of Europe so that Spain control their public accounts is imminent and it will hinder some plans of the expansionary policy of the Government.

Although there are clearly difficulties ahead, there are some elements What are they positive, and whose impact on the economy depends on how we manage them. First of all, the erte mechanism has been shown to be a success, allowing the crisis suppose a less business destruction and be a lot less harmful to employment than in past crises, and that is undoubtedly good news. On the other hand, Europe has taken a very important step in terms of solidarity among its partners, since a very important part of the funds received should not be returned, being Spain one of the largest recipients, with 72,700 million. These funds have a double objective, to contribute to the stimulation of aggregate demand, but also to contribute to the modernization of the Spanish economy. An effort of responsibility and prioritization of efficiency in their use would be essential.

That we do so is already in my letter to the Three Kings. Happy Holidays to all.

The elephant in the room

Joan Miquel Piqué. Economist and professor of strategy at EADA Business School

It seems that lately, the truly modern and innovative thing is to be predictable. The topics what should focus the economic policy they look like obvious, and they are even repeated viciously by almost all experts and governments. We know that we must consolidate trends that have accelerated over the past two years, and handled carefully and effectively to bring us to a best scenario for decades to come. We are watching the transformation of work, the transition to the new reality of fourth industrial revolution, the need for urgent attention to environmental sustainability and the scarcity of natural resources, or the confirmation of the continuous growth of levels of inequality.

Therefore, the underlying issues to work on are clear. And the context in which we are going to have to act is also clear. A context VUCA (volatile, uncertain, complex and ambiguous), already converted into BANI (fragile, full of anxiety, difficult to understand and control). We did not discover anything by presenting a scenario of very high volatility, of abrupt and accused changes of direction. Nor did we discover anything by paying attention to a very fragile economic recovery after the jolt of the last few years. Worries the inflation, worries the Logistic chain, worries the Energy.

But even so, you have to move on. And just as we know where we are, we also know that a framework has already been defined on which we should focus our efforts to drive reality. The United Nations has formulated the 17 Sustainable Development Goals (ODS), and the specialists present a new model of company and society, defined as ‘Triple Bottom Line‘, where profit is no longer the only important thing. It is still legitimate and positive to earn money, especially if it is useful to solve environmental challenges and improve the people’s standard of living. We must invest to evolve towards a sustainable model in economic, environmental and social terms, and we must increase the effort to prioritize those investment projects that are based on these ESG criteria (environmental, social and governance factors).

When these broad lines are raised, some think that they are just well-intentioned ideas or a public relations exercise on networks with little real content and, most importantly and worryingly, without any opportunity for them to become concrete projects that transform reality. Maybe because they seem too difficult, maybe because fear makes us deny them; but, in any case, they become something of politicians. Deep down, it’s as if we don’t believe that We can do something, showing a heartbreaking lack of ambition and vision.

Renewable energies must be promoted and the welfare state maintained

And despite everything, you have to act, and the easiest thing is to dedicate all public money that we have (which in most European countries is always close to the 50% of PIB) to push in the direction that we consider necessary. It seems naive, obvious, almost redundant and irrelevant, but we must insist on acting obsessively to promote renewable energies, keep a Welfare state in which the majority of the population has guaranteed health and education as fundamental social foundations, without stupid battles. We must insist on making the technology be the solution and not the problem. In being alert to unstoppable trends como lto artificial intelligence, virtual assets (NFT), or the revolution ‘blockchain’.

It is time to refound a labor market that offers us, equally, great opportunities and new demands.

Related news

In economic terms, politics what should we start They may be obvious, but they are no less important. One. entrepreneurship as a tool for change, agility and innovation, focused on having more and more companies with technological DNA and social impact. Two. The renewable energy What economic motor and as a reference sector. Three. The transformation of what a means job and the skills we need, with the aim of refound a job market that offers us, equally, great opportunities and new demands. Four. If we are interested in continuing to have a Comprehensive welfare state (as seems to be the case in Europe), begin to solve the foreseeable collapse that is already rushing. And five. Build a strong consensus through a leadership that allows these changes to develop as quickly as possible, with the ability to make decisions without having to waste time on irrelevant issues and, frequently, highly toxic for society and companies.

In short, we see that eThe world is changing and, in fact, reality does not care much if we decide to focus well or lose ourselves in short-sighted and self-interested skirmishes. In fact, over the last decade we’ve had pretty clear evidence of it. The elephant is in the room, let’s see if we can finally see it.


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