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Sunday, December 22, 2024

Spain, neither so good nor so bad

Spain, neither so good nor so bad

Halfway through the year, Pedro Sánchez stated that the Spanish economy was no longer going like a motorcycle, but “like a rocket.” Criticism rained down on him for that triumphalist slogan, but the macroeconomic figures have done nothing but agree with him. Spain’s strength is positively surprising and, with very little left until the end of 2024, all the indicators are coming out better than expected. CaixaBank estimates that growth could exceed 3% and be around 2.5% in 2025. The Spanish bonanza contrasts with the German stagnation, practically recessive; the weakness of France, whose enormous public deficit forces it to pay more for its debt than Spain; or the limited Italian growth, just to mention the large economies of the eurozone. And yet, the majority opinion among citizens is negative.there is a clear dissonance between perception and data when asking about the general situation, which is due to three factors.

The first is the weight of the shopping basket, with a magic word called inflation. Life has become very expensive since 2022 and, although the brutal increase in prices has deflated, inflation has not just gone down, it is sticky, so The loss of purchasing power is undoubted despite salary increases. In the United States, with a very buoyant economy, we have already seen how important the weight of inflation has been in the triumph of donald trump. The second factor is the structural problem that access to housing has become for many social groups. It is not something that only happens in Spain, but here it is very serious, and there are no short-term solutions, so social unrest is going to increase.

And the third element of distortion between macroeconomic reality and negative perception is politics. We are bad. Crispation, polarization, demagoguery. The PSOE has held a resistance congress around the leader against what it describes as “manhunt in court”taking refuge in victimhood in the face of the accumulation of cases. The weakness of the Government is enormous, with the polls against it and the feeling that the legislature could collapse at any moment. And yet, Sánchez resists, demonstrating extraordinary physical and psychological strength. None of its partners is willing to sign up for the motion of censure that it proposes. Núñez Feijóo because the alternative is a PP government with Vox, which grows in voting intention after the negligent performance of Carlos Mazón in the DANA of Valencia. Despite the delicate political situation, once the internal leadership in ERC is clarified, the Budgets for 2025 will be approved, which will be expansive, and rightly or wrongly we will continue until 2027.

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