BARCELONA | By Joan Tapia | We don’t know what 2016 holds for us, but we do know that 2015 will be economically positive. From an economic point of view, 2015 may even be a mini-boom. Apart from the GDP, which has been growing for five quarters, the tax collection is doing relatively well. The central government will stop containing the public spending, even for the Spanish regions, because 2015 is an electoral year. The fiscal reform will be a sort of increase in salary that will boost consumption.
Articles by Joan Tapia
About the Author
BARCELONA | By Joan Tapia | Last month, I warned about the serious political problem in Spain, which was (and is) focused on the Catalonian crisis and the rise of the new political party Podemos. Both could disrupt the political system and kill off imperfect bipartisanship. Meanwhile, the economy was starting to show some signs of improvement. In November, the perception that the economy is improving while politics are worsening has increased and multiplied. It is difficult to argue with the fact that the economy is going better than last year.
BARCELONA | By Joan Tapia | The emergence of the leftwing party Podemos (We Can) and the ghost of a forthcoming political instability weight more on Spanish politics than an unquestionable economic improvement (which is too slow and risky). Anyway the advantage of the conservative Popular Party (PP) in power compared to the Socialist Party (PSOE) was reduced during summer from 8.8 to 3.6 points.
BARCELONA | By Joan Tapia | The Spanish economy has come out of recession and citizens have begun to notice, encouraged by a slight increase in employment creation (albeit temporary, part-time and minimum wage employment, but it at least entails an increase in those joining the workforce). Thus, the CIS’ Economic Confidence Indicator –which ranges from 0 and 100, recorded a low 35.7 (although it represents a 16% increase with respect to 2013). For its part, the Consumer Confidence indicator –which is different and ranges from 0 and 200- is at 89.3, 22% higher than the data from September 2013. The trend appears to point to an awakening of domestic demand.
BARCELONA | Joan Tapia| That the Spanish economy grew by 0.4% quarterly in the 1Q14, and by 0.6% yearly is a real green shoot. After several years of recession, GDP is to grow moderately, around 1% in year 2014. However, employment continued falling by 184,000 people, at an annual pace of 0.5%. A slap in the face for those who told the recovery was more intense than expected.
BARCELONA | By Joan Tapia | Optimism over Spanish recovery should be refined. The so much discussed but effective economic management of Spain’s government is not well transferred to political confidence. As citizens place their political confidence at 29.5 points against 29.9 points of trust in the economy, businessmen have gone in terms of political confidence from a poor 2.16 to another poor 2.33.
BARCELONA | By Joan Tapia | Spain has seen its credibility boosted by the European Commission and other international players like the IMF. However, this brighter image has not been translated into more confidence from its citizens.
BARCELONA | By Joan Tapia | Markit analysts point out the positive impact of the wage reductions that increase the competitiveness of Spanish products and help export. If Europe pulls the cord – as the PMI show- the economy could accelerate in the coming months. The Government exaggerates these data (reforms, foreign capitals inflow, and European growth) to underline that the economy will create jobs in 2014 while other analysts – more independent or from other political areas – show more caution.
By Joan Tàpia | At the end of 2011 and after taking office, Mariano Rajoy’s government made its first decision: a €15 billion budget adjustment which…