The head of Economic Analysis at BBVA Research, Rafael Doménech, during an appearance in parliamentary committee last year.EFE
In a scenario of constant changes in the healthcare situation, making forecasts has become an exhausting exercise of adaptation. The last touch-up has arrived this Wednesday, with the experts at BBVA Research imbued with a greater optimism than three months ago. In the new edition of your report Spain situation They raise the growth forecast for Spain by one point of GDP this year, to 6.5%, and keep it at 7% next, exactly the same metrics used by the Government. Both thus exceed the expectations of Brussels, more conservative in its analysis, which figures progress at 6.2% in 2021 and 6.3% in 2022.
According to the text, however, the risks have not disappeared: the recovery of foreign tourism is key, and is in question due to the restrictions associated with the new delta variant, inflation increases due to the rise in the price of energy, forcing the central banks to rethink their stimulus policy – although the document believes that the price hike is temporary – the deficit and debt will remain high, and the reforms to be undertaken are diffuse. “Without ambitious reforms, which remain over time, most of the growth will be temporary,” he warns.
The research service of the second largest Spanish bank predicted a fall of nine tenths of GDP for the first quarter, but in the end the economy resisted better than expected, and it was only four. This lag is the first factor that explains the revision of the forecasts. And they associate it above all with the surprise rise in exports in February and March, although household consumption and investment in machinery and capital goods also performed better. On the other side of the scale, the most negative data in construction, the stagnation of public consumption and the lower arrival of foreign tourists was not enough to counteract it.
Another point with which BBVA Research justifies a more favorable 2021 for Spain is the evolution of the second quarter, when the long-awaited recovery, so often postponed, should finally have started. Although the official data for this period will not be known until July 30, the entity’s economists now see more reasons to believe in a greater rebound, which is between 2.3% and 3.3% . They base their reasoning on several arguments: the fourth wave had a lower peak and lasted less; the savings rate did not drop as expected, leaving money saved to be discharged; private consumption grew particularly in services thanks to the easing of restrictions and the recovery was intense in catering and national tourism. For Rafael Doménech, head of Economic Analysis at BBVA Research, the vaccination campaign and the internalized lessons have changed the landscape. “The impact of the different waves has been reducing as societies have learned to live with the virus,” he says.
More spending with a card
The increase in consumption and the improvement in employment are already being noticed in the data on spending with Spanish credit cards managed by BBVA, which has particularly benefited bars and restaurants, hotels, transport services and leisure. In the case of foreign cards, the numbers are not so buoyant, and in the second quarter their spending still represented half that in that same period of 2019, although it has increased. Another component that is driving the car is investment in machinery and equipment, which may be one of the first to recover its pre-crisis levels, due to the improvement of the international context, expansion expectations and vehicle registration.
With the 2021 equator past, eyes are not only on an improvement this year, but on a sustained recovery. And in 2022, Spain’s momentum should be even greater if BBVA Research’s predictions come true. With the pandemic already supposedly controlled, it will be time for the savings impounded by families to flow to consumption with force – they calculate that there is an accumulated bag of 68,000 million euros -, a more favorable international environment fuels exports – global GDP will grow 6.3% in 2021 and 4.7% in 2022— and the arrival of European funds, having already overcome the bureaucratic and political procedures for their delivery, inject billions into companies and workers. Although the study service warns: the speed and efficiency in the execution of community money can make a difference. And there are clouds in this area: “The implementation goals seem not very credible and there is no clear, detailed and accessible calendar that gives certainty about how to take advantage of the Plan. What worries the most is the imprecision and uncertainty regarding the reforms to be undertaken in the coming years ”.