The Government of Pedro Sanchez has lowered on Monday one tenth its forecast of economic growth for 2018 and for 2019, up to 2.6% and 2.3%, respectively, according to the macroeconomic table included in the draft budget project that the Executive will send today to Brussels after its approval at an extraordinary meeting of the Council of Ministers. However, the Executive is convinced that despite this slowdown there is sufficient margin with the tax increases that have been agreed with Unidos Podemos to start up in 2019 the increase in spending agreed with this training. In the appearance at a press conference of the Minister of Finance, María Jesús Montero, and the head of the Economy, Nadia Calviño, to explain the draft of the accounts, a very evident optimism was transferred. Both insisted that it can be met both with citizens and with the demands of Brussels, which requires reducing the structural deficit. "Let's be clear, we give Brussels the reduction of the structural deficit that it asks of us," Montero said.
The Government is very optimistic about the approval of these Budgets, which after the agreement with Podemos will depend above all on ERC and PDeCAT. The executive explained that these accounts "are courageous and change the pace" and leave behind the austerity, so he trusts that they will impose their own weight and put pressure on the Catalans to stop conditioning their support for the position of the prosecution in the judgment of the procés. "The rule of law is based on the division of powers and the Catalan authorities know this," explained the spokesperson, Isabel Celaá, who insisted on conveying optimism.
"We have been hearing for years that the crisis had passed, the time has come for the Spanish to notice it," Montero said, explaining some accounts that represent an increase in spending of 5,000 million. The government sends Brussels a budget plan based on a deficit of 1.8% for 2019, which was negotiated with the Commission, but Montero admits that if the budget stability law is not unblocked before the presentation of the budgets, the Government will apply the path of deficit marked by the PP, more restrictive especially for autonomous communities and municipalities
The moderation of the forecast of GDP that marks the Government comes by the adjustment of the foreign sector, which will subtract one tenth of the growth forecast for this year and will not contribute anything to that of 2019 – compared to the two tenths that added each year according to their previous forecasts -. This is a consequence of the worst prospects for exports, which will moderate its growth this year by 1.5 points, to 3.2%, and the one that comes by 1.1 points, up to 3.4%, according to the Government's forecasts. . "We have to follow the international markets very closely, all kinds of developments that may pose a downside risk to growth, part of these threats have already been incorporated as facts so that our forecasts are as prudent as possible," he said. said Calviño.
Spain must send this Monday the draft of the 2019 Budgets to Brussels, as the deadline for the EU countries to send their 2019 accounts to the European Commission ends tonight. The executive arm of the EU will monitor the structural adjustment that Spain must make. Community sources had warned that the red line happens because the accounts, agreed with Podemos, had a certain reduction in the structural deficit, that the Executive has announced that it will be 0.4% of GDP this year.
Imports, according to the Executive draft, will also contract, six tenths this year to grow 4%, and four tenths next, up to 3.8%. The Government's projections regarding national demand improve, with a contribution to GDP that will rise two tenths in 2018 and one tenth in 2019. The Government's forecast includes a moderation of consumption spending of two tenths this year and one that comes , while the investment will increase 1.1 points more than previously calculated in 2018 and four tenths more in 2019.
With these figures, the unemployment rate remains in line with the Government's previous forecasts, at 15.5% of the active population in 2018 and at 13.8% in 2019. The implicit GDP (inflation) deflator it will stand at 1.3% in 2018 (two tenths less than previously forecast) and 1.8% in 2019 (one tenth more). According to the Minister of Economy and Business, Nadia Calviño, the debt forecasts for the end of 2017, when it stood at 98.3% of GDP, will be at 95.5% by the end of 2019.