The Spanish economy recedes to 2014 levels

The economic forecasts of the Government will definitely not be fulfilled. Many were the warnings received from different national and international organizations, which were ignored without blinking. But now it has been the National Institute of Statistics (INE) that has confirmed it with the publication of the accounts of the National Accounts: Spain grows 1.9%, two tenths below the goal set by the Executive of Pedro Sánchez , and that transfers national accounting to 2014 values.

The national economy rose 0.4% in the third quarter, confirming the slower growth rate in three years. In the annual accumulated, GDP grew 1.9%, one tenth less than estimated by the Bank of Spain and the statistics of the INE for the whole year, and two less than the growth foreseen by the Government in the Budget Plan referred to Brussels, which placed it at 2.1%. Precisely, it has been the European Commission that most adjusted its estimates, when it hit full with that 1.9%. Although the Spanish economy accumulates 24 consecutive quarters of positive growth rates, the slowdown in most indicators is evident. It has gone from a growth of 4.2% in 2015 to the review of 1.9% in December 2019, a loss of 2.3 points in just four years.

Domestic demand pulls the car

National Accounting data show that internal demand - internal consumption and investment - is what is maintaining the weight of growth, contributing six tenths more than in the previous quarter, to advance 1.8 points thanks to the «effect Summer »of tourism and sales. In the opposite direction is the external demand –imports and exports–, which only contributed 0.1 points to the total, seven tenths less. Exports again suffered a stagnation, compared to the 1.5% advance of the previous quarter, while imports accelerated their pace to 1.8%, seven tenths more.

Bad data also for the housing sector, The investment entered negative figures after falling 0.3% in the quarter. Despite this, the construction sector earns 2.4% thanks to the number of ongoing projects due to the good prospects that were only two years ago, although it has lost more than four points compared to the first quarter of the year.

Better prospects presented the industry, which after chaining a year with hardly any growth or with negative rates managed to rise 1.2%, including the manufacturing industry, which contributed six tenths to GDP. Investment in machinery, equipment, and weapons systems gained 4.8%, in contrast to the 1.1% decline in the second quarter.

Bad behavior continues to show employment, which despite registering an advance of 1.8%, is seven tenths less than in the previous quarter, with the lowest interannual growth rate since September 2014. This means that only 332,000 have been created. net full-time jobs this year. Labor costs also continue to grow, rising 2.1%, 1.7 points more than in September 2018.

Budgets extended

In line with the forecasts of the INE, the Spanish Chamber of Commerce estimates that the national economy tends to "slow down" after finding that the slowdown has moved "more intensely to the labor market", and its forecasts point to a 2% progress this year and 1.7% in 2020, with a deficit deviation in 2019 "because of political instability and budget extension."

Precisely, the General Budgets prepared by Cristóbal Montoro for the Government of Mariano Rajoy will be automatically extended tomorrow, waiting for an Executive to be invested and has full powers to present a bill with new public accounts in 2020. It will be the For the first time in history, some budgets - amounting to 277,933 million euros - are extended for the second time in a row.