2019 comes to an end marked by a slowdown in the world's major economic areas, although indicators continue to point to an imminent recession. In this context, the case of Spain deserves special mention, as the political question is overshadowed by the possibility of agreements between the left and the extreme left. The concern generated in markets and agents by the commitment to macroeconomic populism, together with the fiscal situation and the unsustainability of the public debt, led IE Business School professor Ignacio Muñoz-Alonso to warn in this #VideoFAES analysis of the compromised situation in which Spain would be left to face the already evident slowdown.
The US, Europe and China have moderated their growth, which economic indicators indicate will continue for several quarters.
Although the outlook is more murky than a year ago, no recession is anticipated in the coming months.
Behind the slowdown is the geopolitical uncertainty caused by the US-China trade war and the brexit and ignorance of the new global trade framework.
Spain | The possibility of agreements between the left and the extreme left and the temptation of macroeconomic populism is worrying on several fronts.
The compromised fiscal situation, of which the European Commission has just warned, and the unsustainability of the public debt, already at 100%, leaves us disarmed and limits our ability to face the slowdown, preventing us from using countercyclical fiscal policy tools.
Macroeconomic populism also has a serious impact on relations with the EU. We have seen it in Italy and Greece: disputes, complicated handling of Budgets and uncertainty.
The agents are unaware of the economic policy that will be followed in Spain and delay decisions on consumption, investment and contracting.
Avoiding these situations is essential to consolidate the growth path in which Spain has been installed since 2014.