Budget Supports Its Figures That The Energy Crisis Disappears

The Government bases its macroeconomic growth forecasts on the fact that the energy crisis lessens next year, inflationary tensions ease and the foreign sector increases its activity by 10% . The Executive foresees strong drops in the prices of raw materials. In 2022, Moncloa expects a moderation in oil prices to around $ 60 per barrel. Since March 2021, Brent oil has shown an upward trend with prices above $ 70 per barrel.

In July, oil surpassed $ 77 , the highest level since October 2018. This evolution is explained by the progressive recovery in world demand and the reactivation of travel and tourism.

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Although the prices of a barrel of European oil seem to have gone too far, the market consensus manages a scenario of oil prices almost 17% more expensive than the one managed by the Government, since analysts expect prices to consolidate in the around $ 70 next year, according to the consensus of analysts collected by Bloomberg.

In addition, there are those who expect the increases to be even greater. Goldman Sachs, for example, has recently revised its target price for a European barrel, raising the estimate to $ 90 by the end of this year, and $ 80 on average next year. Until October, the forecast that Goldman managed was the same that the Government now maintains, those 60 dollars for Brent, which they now consider will fall short.

Core inflation rose four tenths in July, to 0.6% year-on-year
It should be remembered that there are not a few analysts who continue to expect that high energy prices will continue for several months. Sources in the Spanish electricity sector acknowledge that it is most likely that high electricity prices will continue, at least, until the arrival of spring.

The Yellow Book on Budgets, presented yesterday, also foresees that inflationary tension will ease. Core inflation rose four tenths in July, to 0.6% year-on-year -0.7% in August according to the advance published by the INE-.

“In the short term, it is to be expected that tensions will not accumulate in the underlying component, since the progressive reactivation of aggregate demand, driven by savings accumulated by families during the crisis, could focus more on the consumption of services and, in in particular, in services, “says the Budget.

However, international energy analysts suggest that oil and gas prices could remain up to 6 points above the government’s forecasts next year. For its part,the consumer price index (CPI) has risen in recent months. In August it reached a year-on-year growth rate of 3.3%.

The Government insists, on the contrary, that “more than half of this rate is explained by base effects associated with the sharp falls in prices at the beginning of the pandemic, initially energy, to which was later added the underlying to through tourist prices “. In addition, the figures for

Moncloa expect an excellent performance of the foreign market to be produced next year. In his opinion, there will be an increase in total exports of 10% and imports of 10.3%.

The International Monetary Fund has raised its growth forecast for Spain by six tenths
On the other hand, the Executive insists on the growth forecasts for the 2021-2022 biennium, set in the April Stability Program, of 6.5% and 7%, respectively , once the information from the National Accounts of the first semester, and according to all the high-frequency information available since then.

However, the latest batch of forecasts from the International Monetary Fund stand out from the rest of the institutions as far as Spain is concerned. In its World Economic Outlook (WEO), the team led by Gita Gopinath, chief economist of the Fund, lowered its growth projections for our country by half a percentage point to 5.7%. A cut that occurs just three months after its last diagnosis and that widens even more when compared to the predictions made in April – a cut of seven tenths.

Despite these figures, the First Vice President of the Government and Minister of Economic Affairs and for Digital Transformation, Nadia Calviño , insisted yesterday that the forecasts of the International Monetary Fund (IMF) for Spain “certify the vision” of the Executive that the recovery will be It is accelerating in the latter part of this year and it will be “more intense” in 2022, the year in which Spain will be the engine of growth in both the euro zone and the EU.

In response to an interpellation in the Plenary of the Congress of the spokesperson of the Popular Party in the Lower House, Cuca Gamarra, Calviño recalled that the International Monetary Fund has raised its growth forecast for Spain by six tenths for 2022 and stressed that ” the evolution of all economic indicators “confirm that the government’s forecasts for this year and next are” extremely prudent and responsible, “especially with regard to tax revenues for 2022, for which an increase of 8 is projected. 1%.

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