The Spanish economy is already entering negative territory after avoiding recession in the second half of 2022 and may be used by the PP in the regional elections against the government's discourse. This is confirmed by the latest report by the consulting firm Llorente y Cuenca signed, among others, by its financial manager, who is the former minister and economic brain of the PSOE, Jordi Sevilla.
He considers that after the latest INE data for the second half of 2022, "the slowdown is beginning to be felt strongly" and sees an evident "loss of momentum" that "is noticeable in the decline in national demand (consumption plus private investment) and only external demand explains the slightly positive balance of growth". But even if Spain has managed to avoid recession in 2022, it will not be able to overcome the negative terrain between January and March 2023. "With these data: the first quarter of 2023 will have negative growth of 0.1%," he maintains.
This opens a new political front in contrast to what has been defended so far by the President of the Government. According to what Seville signs with the new director of Public Affairs for Llorente and Cuenca, Susana Camarero, "encourages Feijóo's speech for the May elections." "The economic slowdown in the last semester of 2022 and a decrease of -0.1% of GDP in the first quarter of 2023 allow a narrative framework of economic problems for the Popular Party. Núñez Feijóo can thus resume an argument for the elections based on the management and solution of these problems", says the consultant in the report sent this Friday to its clients.
However, the director of the Economic Context of Llorente and Cuenca sees possibilities that the setback of these months can be overcome later and predicts "a comeback in the rest of the year" until reaching growth of 1.5% in the year as a whole. It is much lower than the 5.5% registered in 2022, according to the INE, and the 2.1% that the Government still officially forecasts, but it would make the economy return to growth in this election year.
With this perspective, Llorente y Cuenca estimates that the PP leader will not be able to wield the economy so easily in the general elections, scheduled for several months later than the regional ones. "The expected comeback of the economy in the second semester will make it difficult to reuse it for the general elections."
As good news for the central government, he points out the pact with Esquerra in the Budgets of the Catalan Generalitat, because it gives it "stability" and parliamentary support for reforms of the Housing Law or Gag. He also believes that the PSOE benefits indirectly from the fact that regroupment movements are taking place on its left. "Pedro Sánchez is clear that the only way to reissue a progressive government is for Vice President Yolanda Díaz to be able to unite all the forces to the left of the PSOE. Fragmentation would lead to a loss of votes and seats that would prevent the configuration of a majority. In addition, the fewer interlocutors there are, the easier a negotiation would be with a government coalition".
According to the criteria of The Trust Project
