Madrid is using some key numbers to make a case about the Spanish economic recovery, but it is also forgetting crucial data. The authorities are also ignoring that former PM Zapatero’s austerity plan that started on May 2010 and that Mr. Rajoy is continuing -with some contradictions although with the labor reform’s catalyst- is working very slowly, which means both Spain and its employment rate will take time to recover.
As the IMF pointed out last August, a quicker adjustment would have brought up faster results, but it didn’t take place due to the lack of social and political consensus. The Popular Party, with majority in the Parliament, hasn’t been able -or willing- to give it a try.
But let’s be positive. Exports are consolidating and this has allowed the current account balance to be positive in the first semester- something almost unprecedented -. Plus Spain is experiencing less difficulties to access to financing in international markets, which means overcoming the sensation of financial choking that we had a year ago.
Another good thing is that PMI’s industry (51.1) and services (50.4) indexes are again above the 50 that marks the edge of the recession. The evolution of unemployment is also better: in the first eight months of the year the number of registered unemployed has fallen in 150,000 when in the same period from 2012 had increased at 203,000. However, this is due in part to a decline in the active population -those who say they want to work – due both to many immigrants returning to their countries, many youngsters leaving Spain and long-term unemployed or young people seeking their first job are not registered because they are no longer entitled to any subsidy.