The growth of the economy declared to the Treasury doubles in 2022 that of the GDP published by the INE

On May 12, the State Tax Administration Agency (AEAT) published the results of the first quarter of 2022 of the statistics on Sales, wages and employment in large companies and corporate SMEs (VESGEP). Of the set of statistics based on the quarterly annual declarations of the taxpayers that make up the economy declared to the Treasury, this is the most important short-term statistic of the AEAT. It covers a population of more than one million companies with 94% of the turnover of the 3.5 million VAT filers. It informs, with a broad sectoral detail, of the sales and foreign trade that are consigned in the VAT declarations and of the employment and salaries of the withholding declarations. In addition, domestic sales are grouped by the final destination of the goods and services, approximating consumption and investment.

The statistics present sales and foreign trade data both at current and constant prices and corrected for seasonal and calendar variations. The only sectors that are excluded are Public Administrations, agriculture and energy industries, health and education, and financial and insurance companies, as can be seen in the methodology.

On April 29, the Quarterly National Accounts of the National Statistics Institute (INE) published the advance data for the first quarter of 2022 and on June 24 it will publish the final data. With the advance data, the differences that were observed in 2021 are widened. The attached graph compares the sales of the VESGEP with the magnitude of the Quarterly National Accounts that is closest conceptually: the gross value added (GVA) excluding the Public Administrations, the health and education, agriculture, energy industries, banking and insurance.

As can be seen in the graph, between 2010 and 2020 the difference between the annual variation rates of both sources never exceeded 4 points. In fact, the average difference in those 11 years is 1.4 points. However, in 2021 the sales of the AEAT statistics grow 16.9%, exceeding 4% those of 2019, while the gross value added of the Quarterly National Accounts grows only 7.6%, remaining a 7.5% below the level of 2019. An unusual difference of 9.3 points in the growth of both magnitudes.

In the first quarter of 2022 this difference widens to 11.6 points. The sales of large companies and corporate SMEs grew by 22.7%, while the gross added value of the Quarterly National Accounts for the same sectoral scope only grew by 11.1%. In other words: in 2022 the growth of the declared economy doubles the growth estimated by the INE.

In 2021, the main cause of the discrepancy was in the construction sector, for which the Quarterly National Accounts showed a 2% drop in gross value added at current prices, while construction VESGEP sales grew by 17 .8%. A difference of 19.8 points. In 2022, this extraordinary difference in growth attributed to construction is maintained. The attached table compares the growth at current prices that is deducted from both sources between the first quarter of 2022 and the same period of the previous year for the comparable sectors.

As can be seen, the biggest difference is in the construction. The Quarterly National Accounts estimates a nominal growth of 1.3% in the gross added value of construction, while the sales of large construction companies and corporate SMEs grow by 21.1%.

The INE data for construction presents a striking anomaly, since the annual growth at constant prices is estimated at 2%, which exceeds the nominal growth of 1.3%. In any case, the growth estimated by the Quarterly National Accounts is too low since enrollment grows by 4.8%, employment in the Active Population Survey (EPA), by 4.3%, and the hours in this survey , 6.8%.

The consumption of cement, the official tender and the permits for new construction draw a scene of great activity in January and February, only interrupted by the transporters' strike in the second half of March, which caused a fall of 15.6% in the apparent cement consumption in that month, reducing growth in the quarter to +3.4%. New home sales, which had already grown by 37% in 2021, grew by 13.8% in the first quarter of 2022, reaching 11,500 in March, a level not seen since 2014.

There is also a significant discrepancy in the manufacturing industry. The Quarterly National Accounts estimates a growth of 8.6%, while the VESGEP shows a growth of 20.1%. In this case, the data from the INE is especially surprising, because the body has its own sales statistics: the Industry Turnover Index, which provides a growth of 18.6% to the manufacturing industry in the first quarter of 2022.

In non-financial commercial services, the discrepancy is also 11.5 points. The Quarterly National Accounts estimates a growth of 12.9%, while the VESGEP shows an increase of 24.4%. As was the case with the manufacturing industry, the INE also has good sales statistics for services. These are the Services Sector Activity Indicators (IASS), which provide turnover and occupancy indices with a sector coverage that is practically identical to that of VESGEP Services.

The IASS shows a growth of 21.7% for the turnover of services in the first quarter of 2022, with a difference of 2.7 points compared to the VESGEP. The synchronization between the turnover indices of the industry and services of the INE with the sales of the VESGEP is so close that the resistance of the Quarterly National Accounts to using these statistics to estimate growth at current prices of value added is inexplicable. merchant gross.

In relation to taxes on products, it should be noted that VAT grew by 21.3% in the first quarter and would have grown by 23%, fully in line with sales, without the loss of 400 million euros in VAT from electricity. Special Taxes (IIEE) grow only 7% since they fall on physical consumption and 500 million have been reduced in the Electricity Tax. The Quarterly National Accounts takes from the Treasury, as it could not be otherwise, the tax data, but it is reluctant to accept the sales and salary data from the tax returns in which those same taxes appear.

A final example of the underestimation of economic growth incurred by the Quarterly National Accounts is found in private wages. For the private sector, excluding agriculture, energy, banking and insurance, the Quarterly National Accounts estimates the growth of the wage bill at 10.3%, while the VESGEP puts it at 15%.

The underestimation of growth is also observed when the influence of prices is eliminated. The GDP grew by 6.4% at an annual rate at constant prices, while VESGEP deflated sales grew by 10.4%. The reader interested in the situation who wishes to study the discrepancies in real terms, both from the point of view of supply and demand, should consult the interactive report of the Tax Agency.

In short, it can be stated that the INE's Quarterly National Accounts persist in 2022 in its resistance to reflecting the true intensity of economic growth shown by companies' and employers' declarations to the Treasury, depriving Spanish society of the knowledge of one of its main achievements: the extraordinary vigor of the economic recovery that begins in the summer of 2021 and that continues today despite the war in Ukraine and the transporters' strike.

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