The Basque Government ignores the recession in Europe and improves this year’s GDP forecast to 1.6%

2023-06-13 19:14:49

The Basque Government approved on Tuesday the main guidelines of the 2024 Budget and, at the same time, revised upwards its growth forecast for the Basque economy which, oblivious to the recession – even technical and motivated by Germany – that afflicts Europe today, it will grow this year by 1.6% year-to-year, one tenth above that calculated in March. For 2024 the ‘photo’ does not change and a growth of the Gross Domestic Product (GDP) of 2.1% is still expected; yes, and as a positive fact, unlike what was announced three months ago, the contribution of the foreign sector (the game between exports and imports) will stop subtracting growth and will simply be neutral.

The Minister of Economy and Finance, Pedro Azpiazu, presented this new macroeconomic scenario, of which the chapter on employment stood out. And it is that, Azpiazu pointed out, this year some 11,000 net new full-time jobs will be created in the Basque Country, which will rise to 16,000 next year, compared to the 10,000 in both years that were expected before.

For its part, he added, the unemployment rate in the Basque Country will fall this year to 8.2% from 8.5% in 2022, and will drop to 7.5% next year, an unprecedented level of unemployment in the autonomous community since 2008. “The legislature’s commitment was to bring that rate below 10%,” Azpiazu recalled.

The economic manager of Iñigo Urkullu’s cabinet acknowledged that negative growth in Europe could have “implications”, just like the monetary policy of the European Central Bank, which continues to raise rates against inflation. But he removed iron from those conditions: “Let’s see how that ends.”

Optimism

And he advocated optimism. “The recovery of the developed economies is surprising due to its high employment content, and the Basque Country is no exception,” he insisted, to recall that “some doomsayers” predicted a recession in the Basque autonomous community that has not come in any way. “We reject that possibility,” she said.

What’s more, the Basque economic situation, said the counselor, “is reasonably good, it is positive, and in the year 2024 it will be even better.” The improvement in the official forecasts for the Basque Country came the same day that the BBVA Research Department also raised its estimate for Spanish GDP this year to 2.4% due to “a surprising and positive evolution of exports, which offsets the sluggish domestic demand.

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Azpiazu explained that the strategic approach of the Basque accounts -whose bill will be approved on October 24 in the Governing Council, after the Basque Finance Council is more clear about the collection of 2023- seeks to “consolidate the economic recovery after the pandemic and the global uncertainties that occur.

The objective, added the counselor, will be “to guarantee sustainable economic development and quality employment, together with powerful social policies that ensure the well-being and quality of life of citizens, facing the demographic challenge and betting on youth”.

While waiting for Brussels to close the faucet of flexibility and the mandatory non-compliance with the Stability Pact (debt and deficit limits, which will have to be negotiated in the Mixed Commission of the Economic Agreement) launched after the pandemic, the Basque Country wants to take advantage of that window “to the fullest,” he added.

«The sustainability of public finances is one of the great challenges that we have as a Government, since we will have to be able to combine fiscal consolidation with the colossal investment needs that are necessary to adapt the economic and social fabric to the demands of the fight against climate change,” he concluded.

“Without wanting to put a finger in anyone’s eye, European funds do not arrive”

The Minister of Economy and Finance, Pedro Azpiazu, when asked by journalists after the Basque Government Council about the arrival in the Basque Country of European Next Generation funds and their eventual impact on the economy, refused to enter into “a war of figures” with the central executive. However, straight away, he put some on the table that show that the manna from Brussels is not yet such. Thus, and based on “not wanting to bother or put a finger in anyone’s eye”, he recalled that 2023 was, in principle, the last year to commit that money to specific projects, and that of the 80,000 million in subsidies Of the expected Next Generations, Spain has only 30,000, “a globally low amount.” Azpiazu, who offered his collaboration in this matter to the Government of Pedro Sánchez, dropped that of the 22,000 million distributed to the autonomous communities, only 1,000 have arrived here for their own management; “a small amount”. And he pointed out that the funds will contribute to the Basque economy with a boost that “can only be measured” when they really land. Hours before, the PNV spokesman in Congress, Aitor Esteban, had denounced the “disastrous” management of the Next.