2023-09-26 02:03:58
The Spain from which the brick is thrown is not dead. Despite the attempts – or declarations – of successive governments to try to change the production model towards one based on value-added sectors, Spain remains very “brick”, according to the report “The capital stock in Spain and its communities”. autonomous» prepared by the BBVA Foundation and Ivie.
The document, which analyzes investment in recent decades, begins by contextualizing the investment effort in Spain, concluding from the outset that the public is still at 55% of the maximum reached in 2009 despite the boost provided by the EU’s Next Generation funds. ; and then compare it with the rest of European countries to offer a deeper vision.
Spain, in terms of the growth rate of real investment, far surpassed the most developed countries until 2007, according to the document. But from then on, with the arrival of the financial crisis, investment slowed down in all countries, but it did so much more in Spain, which began to evolve in a similar way to the rest. To the point that, he adds, the Spanish economy is, along with the Italian economy, the only one that in 2022 is at real investment levels lower than those before the crisis. “From standing out above all the countries considered in the international comparison, Spain has come to place itself in the low band in relative terms in terms of investment effort, along with Italy and the United Kingdom,” he explains.
Caveats
Despite the slowdown, the report adds that the composition of Spanish investment has improved considerably, as the investment profile has transformed towards “a more intensive pattern in more productive assets, such as ICT and machinery, while the intensity of real estate investments. Thanks to this process, at the end of the analyzed period, the composition of Spanish nominal gross investment is more similar to that of the reference developed countries, although “with some nuances,” he warns. Thus, he explains, “the weight of real estate assets is around half of aggregate investment (51.4%) and is more similar to that of large European countries, but is still greater than that of the United States.” .
The report ensures that, if we take into account the growth rate of investments from an international perspective, the United States and Spain were the two countries in which real gross investment in ICT and intangible assets grew the most between 1995 and 2020. But it clarifies that the high growth in Spain is explained by “a more unfavorable starting position that is maintained at the end of the period, since its investment effort figures in this type of assets are below those of its main European partners, with the sole exception of Italy”.
Public investment
Regarding public investment, the document highlights that the drop is notable in the case of productive infrastructures, mainly transportation (roads, railways, airports, etc.), while investments in social infrastructures (educational, health, cultural , social services, etc.) suffer a more moderate decline and have concentrated most of the recovery in public investment in recent years.
To explain the reasons for this decline, the report states that after the intense investment process of the first decade of the century, there was an investment collapse starting in 2011, which it attributes to the adjustments to reduce the public deficit.
The analysis warns that since fiscal rules will require adjustments in spending in the near future, “it is important that they consider how to protect public investment better than in the last decade.” As he adds, the fact that adjustments in public finances are directed towards investment “can have negative effects on the long-term growth of the economy and also on the sustainability of public finances in the future, since lower growth means less capacity.” to generate public income. In fact, he explains that the drop in investment has already had significant effects on the stock of public capital available to provide services to businesses and citizens. During the last decade, as it shows, it has not been possible to maintain the accumulated public capital, since the depreciation of the installed capital has absorbed the entire gross investment in some years. In these years, the investment has not been sufficient to maintain the existing infrastructure in good condition, with the consequent loss of public capital and its aging that reduces the services it provides.
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