Cheaper public transport, until when?

by time news

The State has raised its public expenditure figure to a new record – for the second consecutive year – which in 2023 will touch 200,000 million euros. This will allow the Catalan government, as well as the other communities, to also have more room to borrow, moving from a deficit target of 0.1% to 0.3%, which will mean for the Generalitat around 500 million more for budgets. This is the only way to explain measures such as those made public recently by Pedro Sánchez, who has announced more scholarships for students and a 30% discount on Rodalies tickets from September to December, a bet that the Metropolitan Transport Authority (ATM ) has risen to 50% for the most common metro, bus and train cards and tickets. The ATM is made up of the Generalitat, the Barcelona City Council and the AMB, administrations that will therefore also increase spending. This shared course of Keynesian policies, which are also taking place in other countries, starting with Germany (the first to lower transport), aims to cushion the increase in the cost of living: with inflation skyrocketing due to the increase of the price of energy, governments look for impacts in the pockets of citizens, especially the most disadvantaged. Public transport certainly fulfills this function.

They are, of course, welcome measures, with a quick effect. Measures that, on the other hand, are the other side of the coin of the general increase in military spending. What will have to be seen is how long this punctual doping of public transport can be maintained (the military will not be circumstantial). With municipal elections in sight (May 2023), it is plausible to think that the discount will not end in December, but will be extended during the first half of next year. Politically, it seems clear. But the burden on public coffers may end up being unsustainable.

The macroeconomic data are not exactly flattering: this same Tuesday, both Moncloa and the International Monetary Fund (IMF) have lowered growth expectations for Spain, with a forecast of GDP growth of 2% and 2.7% , respectively. The IMF itself warns of the danger of a global recession. The economic situation is slowing right now, but it could get worse. The war in Ukraine, with its energy ramifications, is proving lethal. The fact that the governments of the European Union are acting in a coordinated manner to minimize turbulence, for example with a key agreement to reduce gas consumption (in the end Spain has achieved an exception: a saving of 7% compared to the general 15%), it’s a good sign, but the exit from this impasse will not be easy or quick. In this context, the increase in interest rates (the historic 0.5%) decreed by the ECB to try to curb inflation is also logical. Overall, it is a matter of avoiding the fall in consumption and thus averting the danger of recession. The question is how long the increase in public spending and debt can be sustained. When sooner or later the time comes to raise transport prices again, it will not be easy for the citizens to accept it.



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