The Bank of Spain disagrees with the Government's view
The Secretary of State for the Economy, David Vegara, stated today that there are no reasons to change the 3,3% growth forecast for the Spanish economy in 2008, as in his opinion it remains reasonable, unlike what other institutions such as the Bank of Spain suggest.
After speaking last Wednesday at the Budget Committee of the Congress of Deputies, Vegara reacted in this way following the prediction by the Governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, that the Spanish economy would grow by around 3%.
According to Vegara, "this discrepancy, which will happen more often in the future, is a consequence of an exercise in greater transparency and a broader range of information," and he pointed out that the Bank of Spain prepares its forecasts "independently of the Government's opinion."
David Vegara pointed out that the macroeconomic framework prepared by the Executive for 2008 is "prudent" and recalled that "the organizations do their job, but last year both the OECD and the IMF were wrong with their growth forecasts for Spain."
The Secretary of State admitted that the current situation is not the same as before the summer, but clarified that "a downward revision would only be necessary if a series of conditions are met, such as the crisis lasting a long time or the American economy slowing down further."
During his speech to the Commission, Vegara indicated that "the Spanish economy is in good condition to cope with the turbulence of international markets; in any case, Spain's exposure to subprime mortgages is very limited."
Vegara highlighted the strength of the Spanish economy, which in his opinion "has very dynamic investment, a financial system with clear fundamentals, and very solid balance sheets for its companies. The current mild economic slowdown is not only not negative, but will help to create a more balanced growth pattern."
In his opinion, "the 2008 General State Budgets maintain the defining elements for the country's needs, with special attention to the capitalization of the economy."
Vegara also highlighted "the strength of the industrial sector, the very positive performance of the services sector, the recovery of productivity rates, which is fundamental to increasing per capita income, and the appreciable containment of prices."
All of this, in his opinion, "is not the result of chance, since there has been a budget surplus in the last four years and we currently have a margin that allows us to undertake tax cuts amounting to 8.650 billion in the legislature."
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