Just a few hours after the Governor of the Banco de Espa, Pablo Hernández de Cos, amended practically the entirety of the General Government Budget project, the head of the Independent Authority for Fiscal Responsibility (AIReF) has carried out, also in Congress, an assessment in which they have raised no fewer doubts and warnings. And it has shown that the Executive’s estimates are dead paper, that they are out of date and that the projections included in the accounts presented just a week ago they do not respond to the health and economic situation in Spain.
Herrero has developed, in terms of economic growth, three possible scenarios. The negative and the central are, in both cases, below the Government’s forecasts, while the positive “is the one that would be consistent with the government’s macro forecasts“. In this estimate, the Gross Domestic Product (GDP) would rebound next year by around 10%, including the boost from European funds and the Recovery Plan, and being, effectively, in line with the 9 , 8% estimated by the Executive.
The problem is that “the optimistic scenario rests on unfortunately increasingly distant assumptions taking into account the evolution that the pandemic is having “, Herrero has been blunt.
And is that for it to be fulfilled it would be necessary that the situation of the virus was “more or less controlled at the end of 2020”, that a “Christmas campaign” could be registered and that “the mobility restriction measures were were eliminated “, which would allow a better entry into 2021. And to all this, it should be added that in the second half of 2021 a vaccine was available that would allow a significant reduction in infections. That is, a situation that, beyond the evolution of scientific research, it could not seem further from the current context.
The central scenario, however, could be somewhat more similar to the current situation, “with containment measures that hinder growth but without being necessary a confinement such as that of March and April. “” It would be a partial confinement that would have consequences in 2020 and 2021 and in which there would be a climate of uncertainty that does not favor consumption. In addition, there would be a lesser recovery in world tourism and inbound tourists, “explained Herrero.
In this case, the maximum estimated growth would be 8.2%, provided that the European plans are fully developed and that they contribute up to 2.7 additional growth points, something of which the Tax Authority are not totally sure either given that “there are problems for the absorption of 25,000 million foreseen in the budget for 2021” and the terms are “very tight”.
But if things get worse, and in the end, tougher confinements are necessary, such as those already demanded by some communities, growth it would barely remain at 6.5%. It would be almost 3.5 points less than the official estimate and, as with the central scenario, a totally insufficient rebound to recover the lost.
To all this, it must be added that AIReF also doubts other points such as the evolution of expenses and income, with Herrero having made special reference to the tax estimates. In his opinion, figures such as the tax on financial transactions or the levy on plastic packaging will contribute less of what the Government maintains. Mainly, because they will not be in force on January 1 and because their respective settlements will make part of the income arrive in 2021.
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