Updated Monday, October 25, 2021 – 11:30
The Governor of the Bank of Spain, Pablo Hernndez de Cos.EPCrisis Econmica BBVA Research joins the massive reduction of forecasts and reveals the macro picture of the Government
“You have made them a suit to the Government Budgets“. The deputy for Citizens, Mara Muoz, thus began her first turn to speak after the appearance of the Government of the Bank of Spain, Pablo Hernndez de Cos, in the Congress of Deputies to analyze the General State Budget Project (PGE) by 2022. And although the term may be a bit colloquial and may even seem excessive, the truth is that the head of the regulator has corrected key aspects of the accounts, showing that the Budgets are based on somewhat flimsy figures.
To begin with, because the growth will not be, at all, the one foreseen by the Government. Hernndez de Cos has not yet released a new forecast after which the BdE made public in September, but it has anticipated that there will be a sharp cut in the estimate after the historic revision of the National Institute of Statistics (INE); “mismatches in supply chains global “; the”bottleneck in the industry that have affected the advanced economies more intensely “; and” the insufficiency of the supply of some goods and services to supply the demand has generated a price increase“
“The developments that I have described allow us to anticipate a significant downward revision of the growth of the current year in Spain. In the edition, published in mid-October, the panelists have revised downward by 5 tenths, in the last month, their forecast of GDP growth for this year, up to 5.6%“, he pointed out, a figure that contrasts with the 6.5% expected by the Government.
“The average of the projections for 2022 has remained more stable, being slightly above the 6%“He added. Once again, the data contrasts with the 7% advanced by the Executive and, taking into account the deviations of both years, the joint difference will be around two percentage points.
In addition, with this warning, the BdE joins the International Monetary Fund (IMF), BBVA Research or the General Council of Economists, which are some of the many organizations and analysis firms that have carried out a massive reduction of forecasts growth for Spain.
Risks to the decline in income
Regarding revenues, the Government expects a notable increase of 8% in tax collection just due to the rebound in economic activity itself. The new figures will have “a very reduced tax collection impact,” according to Hernández de Cos. And considering that the expected growth is totally in doubt, there are some obvious “risks” that could “lead to lower income“, the governor pointed out.
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