Partial amendment of the Independent Authority for Fiscal Responsibility (AIReF) to the general budget bill. The supervisor has validated the macro table on which next year's accounts are based, as highlighted by the Minister of Finance, María Jesús Montero, but, as its president, Cristina Herrero, has revealed, it has done so after a "deep debate ” due to the lack of information with which they have had to work in the agency. The Government, it has denounced, has reserved several aces up its sleeve that it has been revealing with droppers, such as scenario two specified in the budget plan presented to Brussels last Saturday.
With its usual critical tone in the classic appearance before the congressional budget committee, AIReF has concluded that the public accounts present "notable shortcomings". In the first place, that the bill is based on revenue closing forecasts that do not incorporate the most recent information for 2022. Cristina Herrero has lacked a more "realistic" forecast of the evolution of the economy.
And, secondly, the authority highlights that the Government has not incorporated anti-inflation measures for a potentially high amount, which, however, it is foreseeable that they will be adopted. Moreover, the Executive announced the week after the approval of the bill a series of measures worth 3,000 million to help vulnerable families. Days later, in the budget plan sent to Brussels, the Treasury announced a scenario "with higher income and expenses than the budgets."
This maneuver, added to the fact that the AIReF has had to endorse a table with the outdated forecasts for June, provoked that discussion in the organization. The ideal, Herrero has explained, would be to change the law so that the independent authority could carry out its analysis after presenting the macroeconomic picture and with the corresponding information on budgetary objectives, payments on account or spending ceiling. These are deficiencies that are becoming a "budget practice", AIReF has denounced.
The body, in short, has given its endorsement to the large figures of the budgets between internal contradictions. It has also decided to lower growth forecasts for 2023 from 2% to 1.5%, below the 2.1% forecast by the Government. The main discrepancy is found in the "dynamism of investment and exports", where the authority is not as optimistic as the Executive due to the international situation of great uncertainty. As the governor of the Bank of Spain did yesterday, Herrero points out that the worsening of the forecasts for the second half of this year compared to what was forecast in May, added to a stagnation in this third quarter, which could go into negative, and that will cause a drag effect at the beginning of 2023.
AIReF draws an economic scenario with curves in the coming years. According to his forecasts and in line with those made yesterday by the governor of the Bank of Spain, Spanish finances would not recover their price level from the pandemic until the first quarter of 2024, after the elections. Specifically, the GDP will moderate to 1.5% in 2023, after having grown by 4.4% in 2022. In 2024 it will rise by 2.7%, in 2025 it will increase by 1.8% and in 2026, by 1. 6%.
The main risks for the Spanish economy, Herrero warned, are the CPI, which will close the year at 8.9% according to AIReF estimates; the price of gas, which does not let up; the rise in interest rates; and the reduction of consumption. And, "as usual", the delay in the execution of the recovery funds, although the authority appreciates an acceleration during the month of September due to the fact that a good part of the distribution is made by the regional and local authorities.
Regarding the reduction of the deficit, the Airef appreciates a 4.4% imbalance between income and expenses this 2022, a figure that should remain at 3.3% next year. But if the Government decides to extend all the activated anti-inflation measures or activate new ones, as contemplated in the budget plan, the hole would increase to 4.6%. It is a decision that the Government is studying, whether to extend the energy tax reduction and the bonus of 20 cents per liter of fuel under the same conditions or to convert these measures into sectoral ones. The authority has requested, by way of recommendation, an analysis of the efficiency and effectiveness of this social shield.
The opposition, in general, has defined Herrero's appearance as forceful. Moreover, both Vox and the PNV have used the adjective "devastating". The PSOE, for its part, has defended the design of next year's budgets.
