The incumbent Government has joined the wave of GDP corrections formulated by all agencies and research services in recent months and weeks. Inside budget plan Government sent to the European Commission this Sunday increased from 2.1% to 2.4% economic growth forecast for this year, but decreased from 2.4% to 2% subsequent years.
The government’s new macroeconomic framework’s forecast of 2% for 2024 is slightly more optimistic than those recently formulated by the International Monetary Fund (1.7%), the Bank of Spain (1.8%) or the European Commission (1.9%).
In the document sent to Brussels, the Government explains: “The lower growth projected for the euro area explains the downward revision in GDP growth for 2024, while consumption and investment are accelerating growth.” The Ministry of Economy predicts an acceleration in consumption and investment until 2024, with the impact of the implementation of the Recovery Planthe dynamism of the labor market and the financial solvency of households and companies, whose debts have reached minimum levels since 2002, according to second quarter financial accounts.
The government expects and predicts that the labor market will maintain its dynamism: More than 700,000 jobs will be created between 2023 and 2024 ray full time and The unemployment rate will be below 11 percent, in a context active population There will be approximately 24 million people. Additionally, the macroeconomic table also includes a prediction. wage increase per employee It is higher than the CPI, which will allow workers to recover their purchasing power during this period.
“Projected low growth euro zone In the document sent to Brussels, the government explains the downward revision in GDP growth for 2024, while explaining that consumption and investment accelerated growth. According to the Ministry of Economy, an examination of the macroeconomic picture contained in the document budget also includes this impact. related to geopolitical conflicts and the increase in ECB interest rates. In any case, the Spanish economy is expected to continue growing above average. euro zone (According to IMF forecast, this rate will increase by 1.2%).
On a positive note, the Government foresees an acceleration in consumption and investment by 2024, thanks to the implementation of the Recovery Plan, the dynamism of the labor market and the financial solvency of households and companies, whose debts have reached minimum levels since 2002. to the financial accounts for the second quarter.
For now, there will be no extension in the anti-inflation measures.
Sending the Budget Plan of public administrations to the European Commission before October 15 It constitutes an obligation for all countries of the European Union. This document should contain the main figures of the accounts of all administrations (State, autonomies and local companies) for the coming year: macroeconomic statement; revenue, spending and deficit estimates; the impact of new measures, etc.
However, the current political situation, with a government in office awaiting an upcoming investment debate, limited the scope of the document on this occasion. “The plan is being considered an inert financial scenario, That is, possible measures and expansions of the economic and budget policy that may be approved for 2024 after the formation of the new Government are not included.”
That is, with regard to the anti-inflation measures that will expire on December 31 (VAT reduction on food and energy, among others), the Budget Plan currently assumes that these measures will expire at the end of the year as planned. However, the possibility that the next Government may extend some of these contracts is not excluded.
Public pensions and salaries
However, the 2024 Budget Plan includes measures mandated by law or already signed commitments. Thus the text adopts revaluation of pensions In addition to the average CPI from December 2022 to November 2023 (expected to be around 4%), public employees’ salaries will also be increased according to the agreement reached with the Public Service unions.