Macro Insights #09

Macro outlook, global focus and micro perspective for September 2024.

Macro outlook

The RealTimeTracker, our real-time monitoring and forecasting model, estimates that quarterly GDP growth would be around +0.6% in Q3 2024, easing slightly from 0.8% in Q1 and Q2. This introduces an upside bias to the projections for the year as a whole, and pushes our annual forecast up by half a point: to +2.8%.

Global focus

After years of suspension forced by external shocks, the EU has new fiscal rules. From now on, Spain and the other countries are required to draw up fiscal path plans that, over a minimum horizon of 4 years, ensure deficit and debt below the commonly established levels, also specifying investments and reforms.

The new framework is intended to be more flexible and adaptable to each country, but until it is put into practice we will not see its real results in terms of achieving the desired objective without unduly hampering long-term investments (defence, decarbonisation, digitalisation) or triggering political crises like that of 2010-2015.

Micro perspective

Under this new framework, the fragility of Spain’s fiscal position (deficit and debt above the limits; a declining demographic profile with the consequent sustained increase in structural spending) will be a particularly tough test: the Independent Authority for Fiscal Responsibility (AIREF, which will in fact play a supervisory role in the plan in coordination with the Commission) estimates that the fiscal adjustment would reach 0.64 points of GDP (€9 billion) between 2025 and 2028.

Part of this adjustment is likely to fall on companies through higher tax contributions, or through keeping in place existing ones that had until now been presented as temporary.