AIReF supports the Government's forecasts but does not rule out worse scenarios

The Independent Authority for Fiscal Responsibility (AIReF) has endorsed the government's macroeconomic forecasts for the update of the Stability Program, which it considers "feasible", although it does not rule out more adverse scenarios in the intensity of the recovery.

In a statement, AIRef sees "reasonable" in the context of great economic uncertainty the scenario of the Government that predicts that the collapse of the Spanish economy as a result of the coronavirus crisis will reach 9.2% in 2020 and that the rate of unemployment rise to 19%.

"Taking into account the available information and assuming the government's assumptions about the intensity and duration of the pandemic, AIReF considers that the macroeconomic scenario is feasible," they summarize.

However, they add, more adverse scenarios cannot be ruled out, mainly derived from the intensity of the recovery.

Among the risks indicated by AIReF is the possibility of more adverse epidemiological scenarios or more persistent damage to the productive fabric that "would hinder the recovery projected for the second half of 2020 and 2021".

Thus, it recalls the concentration of activity in Spain in the sectors most affected by social distancing measures, the high temporality that persists in the labor market and the greater relative presence of small companies.

Along with this, AIReF notes that "it has not received the fiscal scenario or the details of the assessment of the approved measures and their transfer to the macroeconomic picture" and requests that the exchange of information be systematized and the details of the assumptions be expanded and hypotheses that are incorporated in the design of the macroeconomic scenario.


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