The strength of the Spanish economy has been put to the test at the end of April in which economic data has accumulated, with a first quarter in which economic growth has accelerated, inflation has picked up and employment has endured , despite the increase in unemployment due to the massive incorporation of new people into the labor market. A process that culminates with the presentation of the stability program that the Government has sent to Brussels this afternoon, just in time, since it only had a margin until Sunday.
A program that includes a review of the Government's macroeconomic framework that had remained intact since October, which includes the commitment to advance the reduction of the deficit to 3% in 2024, which was already announced yesterday. In addition, the Government maintains its growth forecast of 2.1%, despite the tightening of monetary conditions. It is an estimate that is above the forecasts of the different international organizations that place it at around 1.6%.
It is a growth that will increase to 2.4% in 2024, to later stand at 1.8% in 2025 and 1.7 in 2026. It is what the Government describes as "a robust growth path" in the 2023 period and 2026, driven by employment and private consumption. The recovery plan will also play a role, which is what will allow the acceleration in 2024, and which will make it possible to offset the foreseeable negative impact of the more restricted monetary policy.
The macroeconomic picture foresees that domestic demand will be the main driver of growth this year, and especially private consumption. This consumption that has been falling for two consecutive quarters, but which the Government believes will recover thanks to employment and the deployment of measures and reforms, in addition to the moderation of inflation. The calculation is that in 2024 it will increase to 3%, which will also help the savings accumulated in households during the pandemic.
In terms of employment, it calculates that in the period 2023-2026 1.1 million jobs will be created and that the unemployment rate will gradually fall to below 10% in 2026. A job that the Government considers will be accompanied an increase in the active population and an improvement in the quality of its quality.
With the modifications introduced, the deficit reduction path in the 2023-2026 period remains at 3.9% this year, which would drop to 3% in 2024, 2.7% in 2025 and 2.5% in 2026. One year ahead of the reduction of the deficit to 3% is feasible, according to the Government, due to the growth of economic activity, the increase in tax collection and the good behavior of employment.
With regard to debt, a reduction in the ratio is expected in recent years, which will allow it to fall below 110% in 2024. In this case, as in the deficit, the target is brought forward by one year.
The economic scenario on which the program is based is described by the Government as "prudent" and has been endorsed by the Tax Authority (Airef)
In 2023 marked by the regional and municipal elections on May 28 and the general ones at the end of the year, the stability program brings together the commitments assumed with Brussels in economic terms in the near future, although the general budgets will not be approved this year of the States for 2024, for the holding of the general elections.
The presentation of the stability program comes in the same week that the European Commission has made public its proposal to reactivate fiscal rules. The free bar in spending that was granted to deal with the pandemic will end, but the transition towards fiscal discipline will be gradual and, importantly, it will apply more flexible and personalized mechanisms based on the needs of the different countries. It is a proposal, however, that foresees forcing a minimum annual adjustment of 0.5% to countries with a deficit of more than 3% and for those that, as a consequence, open an excessive deficit procedure.
