For some time now, the Ministry of Economy has demonstrated the reliability of its economic forecasts and the greater skill it has shown in recent years when it comes to predicting the real behavior of the Spanish economy relative to Spain’s. … Other national and international authorities for economic forecasting such as the International Monetary Fund, the OECD, the European Commission or the Bank of Spain itself, whose forecasts for the Spanish economy have recently dropped to repeatedly underestimating its potential. Indeed, the matter has become a matter of controversy, not so much in Carlos Cuerpo’s current phase as Minister of Economy, but in Nadia’s phase. Calviño did not hide his frustration for this circumstance.
However, during all this time, the state standard regulating the standards for preparing economic forecasts and budgets required the government Take into account the information published by organizations Such as the European Commission, the Bank of Spain, the International Monetary Fund, the Organization for Economic Co-operation and Development, or the World Bank, to formulate the basic assumptions that guide their official forecasts, with the aim of ensuring that they move within a range of caution and do not slide towards excessive triumphalism driven by the more urgent tone of the data or the potential interest that the government in power may have.
The Ministry of Economy decided to put an end to this historical connection. It has just approved amending the generous royal order regulating the requirements for applying economic forecasts and the budget for the year 2018, eliminating caution against passing the basic assumptions on which the Ministry of Economy bases its economic forecasts and budget by the Council of Ministers. Sieve what Europe thinks about itMainly the rest of the international organizations or an institution that has a good reputation such as the Bank of Spain.
We talk about key aspects when preparing these forecasts, such as the expected growth of Spanish export markets, short- and long-term interest rates, the development of oil prices, forecasts of the EUR/USD exchange rate, and other volumes of similar importance.
Economics claims its technical solvency
Economy Ministry sources attribute the change in the rule to its decision to “respect the literal wording of the information requirements” established by the 2024 European Directive regulating the preparation of forecasts by Member States, which did not include the caveat that was in the 2018 Spanish regulations. They also add that “we believe that The Ministry of Economy has sufficient resources and technical capacity To develop their forecasting assumptions.
Unofficial sources from the Ministry offer a somewhat more comprehensive explanation, pointing to the imbalance between the lack of technical prowess of the economic forecasts made by international organizations about Spain and, conversely, the relevant media impact they usually generate. They consider that there is a lot of information available at the Economic Analysis Department in the Ministry of Economy Wider, refined and updated than those used by major international institutions, including the European Commission, to formulate their forecasts, and it makes no sense to use the latter as a guide when they are of lower quality.
Which It bothers the Ministry of Economy This was evident in the recent book by the former Minister and First Deputy Prime Minister, Nadia Calviño, who devoted an entire chapter not only to criticizing the gloomy tone of the economic forecasts of international organizations and national analysts about Spain, but even to question the work of the official statistical institute, the National Institute of Statistics, for maintaining a methodology for measuring GDP that underestimated Spanish growth.
In fact, this regulatory adjustment to the requirements that the government must follow when preparing its economic and budgetary forecasts is taking place in the midst of the political controversy surrounding… Alleged interference by Nadia Calviño in the National Institute of Statistics – Reported by the state’s highest statistical body – during those months immediately following the pandemic as the economy was questioning the information provided by statistics through national accounting with data.
I am relieved by the lack of synchronization between the information published by the National Institute of Statistics and the high-frequency data (bank card spending, daily enrollment data or observed navigation on mobile phones) that the Ministry of Economy includes in its economic analyses, and I am frustrated by It was recognized as the European economy that was slowly overcoming the pandemic When its data did not say the same, the ministry developed its own dashboard to track the development of the Spanish economy, under the supervision of the current minister, Carlos Budde, and then his successor, Victor Ocín, and became convinced that no other organization or institution of analysis was more accurate in either measuring or forecasting the development of the economy. The legal change that has now been made is the arrival point of that conviction.
Climate change bill
The new royal decree approved by the Ministry not only separates the government’s expectations from the long shadow of those of international organizations, but also pledges to introduce an assessment of the impact on public finances, economic policy and growth of events related to climate change, and even measure the future risks that may arise from them in the form of contingent liabilities.