The so-called 'fiscal residuals' accumulated after the pandemic would be “practically zero” MADRID, Dec. 2 (EUROPA PRESS) – The Bank of Spain has calculated that in the second quarter of 2024, the Spanish Gross Domestic Product (GDP) stood at 5.7% above its pre-pandemic level, a positive gap greater than that registered in the Economic and Monetary Union (EMU) as a whole, which did not exceed 4.2%. In any case, the organization directed by José Luis Escrivá has indicated that this aggregate for the euro area masks a high heterogeneity between countries and is greatly influenced by the weakness registered in Germany, whose positive gap with respect to pre-pandemic levels is 0. 2%. This contrasts with the greater dynamism observed in countries such as Greece, Portugal and Italy, whose activity levels in the second quarter were 8.5%, 6.8% and 5.5% above their levels prior to the pandemic, respectively. The Bank of Spain has carried out an analysis of the revisions of the Annual National Accounting (CNA) and the Quarterly National Accounting (CNTR) published in September by the National Institute of Statistics (INE), and has studied, until the second quarter of 2024, the evolution of the Spanish economy in recent years compared to that of other European countries. As they recall, the INE revisions raised the accumulated GDP growth in Spain by one percentage point between the fourth quarter of 2019 and the second quarter of 2024. This revision is in line with those of countries such as France and Italy, where growth accumulated GDP since the end of 2019 was also revised upwards by 1.3 points and eight tenths, respectively. In Germany, on the other hand, the revision was one tenth downward. In Spain, the revision of the pace of GDP growth since the pandemic is explained by a greater contribution of national demand (+1.8 points) to product growth – due to a greater dynamism in public consumption and investment than reported above–, which more than compensates for the opposite revision (-0.8 points) in the contribution of net foreign demand to growth. By branches of activity, GDP growth since the pandemic is explained practically entirely by the dynamism registered in market services, without significant changes compared to the figures prior to the revisions.
LOSS OF COMPETITIVENESS DUE TO HIGHER UNIT LABOR COSTS
The new series also indicate that, in the period after the pandemic, unit labor costs in Spain have grown by 21.5%, which is 1.7 points above what was previously estimated, since compensation per employee increased has revised upwards more intensely than productivity. This represents a slight loss of competitiveness in relation to the EMU as a whole, where unit labor costs have increased by 18.3% over the same period. However, the growth of the unitary gross operating surplus after the pandemic has been lower in Spain (12.7%) than in the EMU as a whole (22.8%).
THE “FISCAL WASTE” AFTER THE PANDEMIC, VIRTUALLY NIL
Finally, the Bank of Spain points out that, with the new series, the evolution of tax collection since the end of 2019 is consistent with that of the macroeconomic bases in accumulated terms. That is, according to the revised figures, the so-called “fiscal residues” accumulated after the pandemic – the part of the collection not explained by the evolution of the fiscal bases and measures – would be practically zero. Specifically, according to the new series, the fiscal residuals would have been positive between mid-2020 and mid-2022 – due to a positive contribution of the residuals in the collection of personal income tax, social contributions and VAT –, to move to be negative from then until the second quarter of 2024.
Spanish GDP is 5.7% above the pre-pandemic level, better than the EU average, according to the Bank of Spain
