The shadows of the surprising cut of 6,000 million in GDP

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The revision of the macroeconomic figures carried out by the INE in mid-September continues to pick up months later. At the gates of a new election, the review of national accounting not only triggered the recognition by the Government that the clouds were closer than announced and were more loaded, but also generated a live runrun between organizations and academics . Not for the review itself, customary in statistical institutions, but for its opacity, in addition to the intensity and the change in composition.

The history of the recovery of the economy had not been as it had been told: GDP now had a weight 6.055 million less and with almost 500,000 fewer jobs. This new revision reduced the growth of 2019: in the first quarter it did not grow 0.7% as it was said at the beginning, but 0.5%; in the second, it was 0.4% and not the 0.5% that was initially announced. And in 2018 it grew 2.4% – two tenths less than what was initially published -, in 2017, 2.9% – one tenth less – and in 2016, 3% – two tenths down – while that in 2015 the recovery was much greater: GDP advanced 3.8%, compared to 3.6% that was initially thought. In the new series it turns out that it grew somewhat less in the years of the "boom", the crisis was more intense than calculated at the time, and that the recovery was greater but the slowdown, too.

The revision of the INE came by European mandate and took place in all EU statistical agencies, but it has not seated academics and organizations because, in his opinion, it has been carried out opaquely and with excessive volatility in recent data. The INE added data that it did not have before as the Family Budget Survey, in addition to updating economics information not declared by the greater collaboration with the Tax Agency and the Ministry of Labor.

The Independent Authority for Fiscal Responsibility (Airef) complained in its latest report on the budget plan that "there has been no active policy of communicating methodological developments". Although Airef emphasizes that the INE has fulfilled European quality requirements and criteria, it regrets that the dissemination of national accounting “does not fully satisfy two basic principles in the operation of any statistical producer: user orientation and transparency In communication".

«Every forecasting exercise must have as its starting point the understanding and modeling of economic relations. If these relationships have been affected by statistical changes (sources, techniques, models, assumptions), it will be necessary to know their details, ”criticizes Airef, who had already directed darts to the work of the INE in the past when questioning its demographic forecasts. "Faced with a review as significant as the one that the INE did, a greater explanation would have been appreciated," agrees Gonzalo García, head of Afi Economy.

The INE presented and published the methodology of the new national accounting on April 3 and presented it to the Higher Statistics Council, to which CEOE or Airef itself belongs. In October 2018, in addition, he held a technical session and in all publications since July he advised of the future revision.

But the doubts of the experts also point to the volatility of the new series. The INE published a week ago that the GDP grew 0.4% in the third quarter, with a greater pull of domestic demand and less of external demand. The sudden stagnation of household consumption in the second quarter, at 0%, and its subsequent rebound at 1.1%, in the third quarter is also strange for economists.

Zero to one hundred
"The consumption data for the second quarter seemed a bit exaggerated to me," says Funcas International Short Term Analysis Director Raymond Torres. "We now have the problem that the GDP growth estimate does not match other activity indicators that We have known as trade or industrial production, ”he says to add that“ more transparency in this type of revision is always useful ”.

The head of economic analysis at BBVA Research, Rafael Doménech, focuses on the change in components of GDP that ELINE now throws. "It highlights the worst evolution of investment in machinery and equipment, which in the accumulated 2008 to 2018 was 14% lower than previously estimated," he warns. And he adds that "this results in a less optimistic diagnosis of the future evolution of the Spanish economy." Garcia recalls the roller coaster that has led to the evolution of the Spanish economy in recent times, from the recession to a brilliant growth. "It takes more time to digest all the information we have had in recent times," he reflects.

The public sector spent 314 million to raise salaries when it was not due before the INE review
The Government of Rajoy committed with the unions of officials to raise public salaries in 2019 an additional 0.25% if the GDP of 2018 grew at least 2.5%. This review should be done in July, when the INE confirms the growth data of the previous year. Growing in appearance by 2.6% in 2018, the Sanchez Executive approved the payment, which affects all administrations. But in September, the INE revised the growth down to 2.4%, after the administrations already made the payment of 314 million without GDP growing at the agreed level. . (tagsToTranslate) doubts

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