The Wall Street Journal
If many Spanish families have welcomed in the fall of prices in the economy which allows them a relief to their beaten pockets, the persistence of a deflationary context may affect debtors who pay their obligations in real terms by endangering its ability to pay will be increased significantly. Produce increased widespread delinquencies, this will represent a further blow to the economy. How long can the recession in Spain last? In relation to this issue, the Bank of Spain too optimistic is not displayed. The latest projections by the Bank of Spain point to a contraction of GDP of 3% for this year and 1% in 2010. The IMF pessimistic about prospects for the global economy has shown since it considers that the same is contraeria this year, between 0.5% and 1%, while the economic recovery would occur in 2010 if Governments increase their interventions in the economy. Against this negative external context, not There are good prospects of recovery for the economy of Spain.
With the downturn in the Spanish economy, the labour market suffers from a particular way the crisis. The deterioration in the labour market is such, that unemployment would have reached to 17% of the economically active population during the first quarter of the year, according to the information that emerged from the last Bulletin of advancement of the market labor Afi-AGETTES. In relation to the economic activity, became known yesterday that industrial production in Spain registered a monthly contraction of 1.7 per cent in February and 22% in interannual terms (greater contraction of industrial output within the eurozone economies). Against an economy that falls into a tailspin, the logical reasoning is that the Government of Jose Luis Rodriguez Zapatero should take extra efforts and launch new economic stimulus packages. But this is far from the possibilities of the Zapatero government.
In an interview that granted the U.S. newspaper, The Wall Street Journal, the general director of the service of studies of the Bank of Spain, Jose Luis Malo de Molina said yesterday that Spain has no more scope to launch new economic stimulus measures. For worse, Malo de Molina believes that if you had it, would they have a little effect on the economy. For this year, the fiscal deficit of Spain could reach 10% of its GDP, making the fiscal front a new problem to be solved urgently. There is no doubt that the Spanish economy is in a vicious circle from which it is very difficult to escape. With a Government with few weapons to bring the economy of the crisis, and a crisis that feeds itself, how can find you a way out of this situation? For one thing, the answer lies in find the contribution and commitment of all sectors of the economy, and ensure that the Government and the opposition sit down to dialogue to reach consensus on ideas. Spain will probably need a new social pact to overcome the crisis.