A 6% growth estimate for 2021 according to BBVA Research compared to a figure of up to 9.8% projected by the Government. The difference, therefore, almost four percentage points that portray the executive’s excess of optimism in its estimate of economic recovery.
The entity’s relevant research services published its growth forecasts for 2020 and 2021 this Wednesday, and not only has it not endorsed the Government’s figures, but has even worsened its estimate of rebound for the year that comes. And the impact of European funds, they foresee, will not cover the deterioration of the situation.
“The forecast would go from 7% previously to 5%, two points less, which are not offset by the effects of the European program,” explained Rafael Domà © nech, head of macroeconomic analysis at BBVA Research at the press conference presentation of the report Spain situation. “We have chosen prudence and consider that it will have an effect in 2021 of one percentage point, “he added, giving that final figure of 6% for 2021.
“The GDP growth forecast for 2021 is lowered by one percentage point to 6% as a consequence of the deterioration of the health situation. A growth of an additional point in 2021 due to the effect of the European program, and a growing effect in the coming years “, has influenced Jorge Sicilia, director of BBVA Reserach and chief economist of the group.
“Aspirational goal”
The notable difference between the additional point of growth that BBVA grants to European funds and the 2.8 of the Government lies in the fact that the study center assumes that in 2021 “between 10,000 and 15,000 million will be added.” “The Government’s 2.6 points is more of a potential, aspirational goal. It is more realistic to choose prudence given the information, “explained Domà © nech, who also pointed out that in the following years the impact will be higher but, in any case, it will yield an average of 1.5 points.
“We need to know a lot more details of the European program to move to higher figures. There are doubts about how fast the execution can be of the proyects. Spain, up to now, has been slow in the execution of the structural funds “, has influenced.
But in addition, the study center considers that the economy will suffer a notable slowdown in the fourth quarter, which at the same time causes the starting point to be lower than that of the Government. “The decline will be quite intense, going from growing 14% in the third quarter, to growing only 2% in the fourth trimester. And there has been a stagnation in the output of the activity, which also contributes to the slowdown in economic activity, “said Domà © nech.
Upward revision
The situation of Spain, moreover, contrasts with that of the United States, China or the whole of the Eurozone. For all these economies there has been an improvement of forecasts, which is in line with the decision made last week by the International Monetary Fund (IMF) to increase estimates for all developed countries save for the Spanish economy.
On the other hand, the estimates known this Wednesday also contemplate that the unemployment rate will be 17% this year and will rise to 17.5% in 2021, figures that in both cases are, once again, worse than those of the Government. The deficit will also be above the Executive’s estimates, and the public debt will rebound to 121% in 2021.
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