Fernando González Urbaneja | “GDP and employment are increasing, the external balance is improving… while productivity, per capita income, and convergence with the EU stagnate”.
The Spanish economy shows ambivalent signs that, depending on the data and periods chosen, serve a multitude of purposes. The government chooses the best of the repertoire to conclude that the economy is the electoral weapon to win support; in fact, the new economy minister is showing up in public forums all over the place, highlighting the most favourable aspects of his subject. This is his right. Incidentally, he avoids getting involved in other matters where the other members of the cabinet are accentuating the strategy of tension and confrontation with outright and programmed disparagement of the opposition.
It is obvious that the growth figures are among the best in the eurozone; it is also obvious that employment is growing at the same time, even more sharply. And it is clear that the foreign trade and balance of payments figures show unprecedentedly favourable balances. The latter is perhaps the most striking change in pattern compared to what has been the norm in Spain’s economic trajectory for many decades. A positive external balance is a rara avis in the composition of national GDP with the advantage that it is a consolidated trend. The overall GDP and employment data do not take into account the calculation base, which is greatly affected by the strong migratory flow that, far from subtracting income, adds to it. Over the last six years, the population registered in the EPA as over 16 years of age has grown by 2.1 million people and the employed population by a similar figure. So the increase in employment is largely due to two factors: the foreign population (800,000) and public employment (520,000 jobs).
Nor should we lose sight of the fact that in these six years the increase in public debt has reached almost €400,000 million, financed to a large extent by the European Central Bank without question and at rates close to zero. A figure that represents a major accelerator of growth, which is currently being maintained with the New Generation EU Funds that are in full operational phase and should last until 2026. The less optimistic part of this picture comes from the stagnation of productivity, per capita income and convergence with the European Union, all data that do not invite optimism. Nor does the fall in public and private investment, which contrasts with the increase in consumption, encourage optimism. A society confident in the future and therefore consumerist, which coexists with a restriction of investment accentuated by the fall in credit to families and companies, which can be explained by the rise in interest rates and also by a clear lack of confidence in the future. In short, the economy is growing, boosted by the foreign sector, domestic consumption and public indebtedness, but with symptoms of mistrust and weak investment.
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