The BBVA has cut back its growth forecast for this year and next. In 2019, GDP will grow by 2.6% instead of the 2.8% that was previously expected. And in 2018 the economy will advance 2.4% instead of 2.5%. The slowdown is explained by the drop in growth in both exports and private consumption, says the entity. And he adds that it has also been influenced by a worse behavior more recent tourism services.
"Forward growth is expected to remain strong, although below the average of recent years, "says the report published on Tuesday, although BBVA Research emphasizes that activity in Spain will continue to perform better than in the rest of the eurozone with average growth above average point.
On the one hand, the entity emphasizes that private consumption had been advancing for some time over what the incomes of households were growing, a fact that explains the moderation that is now being experienced. Regarding the foreign sector, remember that this year has recorded lower growth than in previous years amid the global slowdown in trade and the uncertainty generated by protectionism. However, it foresees that they can improve something next year as the demand of our commercial partners recovers.
The worst records are not due to merchandise sales, but to sales of services. And in particular BBVA affects the behavior of tourism. In the opinion of the entity, this has been losing competitiveness due to capacity constraints that have been generated in some Spanish destinations, the evolution of the euro and the lower dynamism of the countries of origin of tourists. "There are growing doubts about the sustainability of tourism's contribution to job creation," he says.
On the other hand, the BBVA appreciates, nevertheless, positive notes. He observes that the Spanish economy has fitted well with the rising cost of oil absorbing it in the margins. And that expectations about the price of crude oil are that it should go down. In addition, monetary policy will continue to be expansive and will help the investment to continue to experience positive advances. Above all "it can be especially favorable for the recovery of the residential segment of construction, labor-intensive and whose contribution to job creation should be increasing," he says.
In any case, BBVA stresses that the risks are very numerous and that "only the uncertainty about its realization could be enough to slow growth in the coming months below our forecasts." Given the high uncertainty about protectionism, the Fed, the Brexit or Italy, the entity recommends "reduce uncertainty about the measures that will be implemented in the coming years in Spain." Especially because of the slowdown in the economy, and the high imbalances that persist.
The BBVA calculates that without any measure the public deficit will end the year at 2.8% and at 2.2% in the following fiscal year. To reach 1.8% in 2019, he argues that "additional adjustment measures should be approved, regardless of any increase in expenditure that may occur." In this regard, he asks that the imbalance of the pension system not be aggravated and that measures be taken to minimize the impact on the activity. Therefore, he argues that if it is decided to increase the tax burden either through indirect taxation. Finally, he urges that reforms that reduce high structural unemployment and temporality be approved.
According to these forecasts, job creation will continue to increase although at a somewhat slower pace. In 2018, employment will grow 2.6% and the unemployment rate will fall two points to 15.3%. In 2019 it will grow 2.2% and unemployment will decrease to 13.7%.