Short-term data indicators are positive: the activity in the service sector accelerates; consumer trust shows signs of optimism again; production, billing and industry orders grow; activity in the construction sector starts rising; and the external sector keeps registering very positive figures regarding exports and tourism.
In that sense, private consumption grows more than the PIB, something which happened in previous economic cycles when the perception of recovery gained strength. Moreover, the economic improvement is noticeable in the strong creation of employment of the past year.
At the same time, the context is absolutely favourable to strengthen that recovery: low fuel prices, the absence of inflationary pressures, the drop in the euro exchange rate, interest rates at a minimum, the stimulatory monetary policy implemented by the ECB and a less restrictive fiscal policy.
Nevertheless, Foment alerts of the internal risks of this economic recovery, which now come from the election cycle in which Spain has entered. The outcome of that process, taking into account the current political fragmentation as a consequence of the last municipal elections, may lead to a scenario of greater difficulties for governability. Foment believes that the politicians should take their responsibility and continue in the path of implementation of the necessary reforms for the consolidation of economic recovery and employment in Catalonia and Spain. Foment asks all the political and institutional representatives an exercise of responsibility in favour of governability and that rejects the maximalist or autistic positions. The governability of institutions is essential to ensure the economic recovery. Foment reminds that employers and workers’ organizations have made an effort to negotiate, and that has led to the agreement for the criteria on salary increases that will enable a negotiating social peace in the three coming years.
Accordingly, it is essential to take advantage of this positive phase of the economic cycle to culminate the process of restructuration of the economy, and to boost the pending reforms to the benefit of competitiveness and the increase of productivity with innovation, liberalization and internationalization policies. It is important to achieve a model for economic growth that is sustainable and to strengthen the improvement of the labour market, while at the same time maintaining the correction of macroeconomic disequilibrium, such as the high public debt and deficit. Ultimately, the goal now is to consolidate economic growth.