CaixaBank, CEOE, Repsol, BBVA … nobody trusts Snchez to tackle the deficit

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The study services that participate in the panel of the Savings Banks Foundation argue that the Government barely reduces the budget deviation in 2020

The President of the Government, Pedro Snchez, along with Cristina Carbona and Jos Luis Balos at the meeting of the Federal Executive of the PSOE held yesterday.

Sixteen study services consulted, and 16 responses in the same direction: the deficit will not be reduced significantly in the present year. It is the conclusion that throws the forecast panel of the Spanish economy that Funcas published yesterday, and in which some of the most relevant entities of the country intervene as they areBBVA, CaixaBank or Bankia, in addition to the analysts of the Savings Banks Foundation, lto CEOE, the Chamber of Commerce of Spain or Repsol.

Only one of the forecasts argues that the deficit falls below 2%This year, which is the Economic Prediction Center. But even in this case, the correction of the deviation will be very limited, since it will only be reduced by four tenths. The rest offers figures that, in no case, are below the two points of Gross Domestic Product (GDP), and that show the total distrust that the Government is able to meet the 0.5% deficit target or to make the structural adjustment requested by Brussels.

The Executive trusts, on the one hand, in being able to renegotiate the path and, on the other, in taking forward the measures in fiscal matters that it intends and that will significantly increase revenues, a variable that the study services do not contemplate, since these are still unapproved measures. But when I take them out, it will have been several months of the year, even half a year. In addition, the new figures and the tightening of taxes do not translate into an instantaneous increase in revenue, they need some time to begin to be noticed, which further reduces the impact. In other words,that the final impact be less than that foreseen by the Government.

To this we must add that the vast majority of the 16 panelists who have offered their estimate of deficiency agree, once again, that the reduction of the deviation during 2019 was very limited. It is a position similar to what the Bank of Spain has already stated on more than one occasion,which has even pointed out that 2019 was a lost yearin this sense and that the reduction that has occurred is due exclusively to the favorable effects of the economic cycle, as well as to the continuation of the process of reduction of the average cost of debt, and not to the efforts of the Executive.

The unemployment reduction forecasts also show notable divergenceswith respect to those of the Ministry of Economy. In this case there are 19 study services that offer their forecast, and none of them consider it feasible that the unemployment rate is less than 13% in 2020. In fact, the average indicates that unemployment in terms of EPA barely exceed 14 , 1% to 13.5%. The Government, on the other hand, maintains that the figure is 12.3%.

And finally, most estimates indicate thatthe Executive has been slightly optimistic in terms of growth. But in this case, at least there is a panelist who estimates that the 1.8% rebound to which the official forecast rises may be feasible and others that point to 1.7%.

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