The data published by the INE on the Quarterly National Accounts (CNTR) of the ITR-2020 They are lousy, but their worst face is the one that has not yet appeared, which is none other than that of the future that can await us if the economy does not open immediately. With the Government’s plans to keep economic activity tied, with the aim of opening hotels for more than two months without allowing national tourists to move throughout Spain, and with the ceiling it imposes on commerce and hospitality. , especially the latter, of capacity, which makes its profitability unfeasible, everything points to the fact that these published data are only the preamble to the disaster and that they will prevent a strong and robust recovery, condemning us, after the fall of 2020, to a long stagnation.
That horizon is therefore ruinous, since it will be worse than what happened during this first quarter, when we only really had fifteen days of hiatus within a total period of three months. Let’s imagine what will happen when the data on cessation of activity is collected for a whole quarter, as it will happen in the second quarter of carrying out the suicide plan that the Government has proposed, that if it failed to manage the health crisis, if execute those plans and do not immediately reopen practically the entire economy, it will also fail economically, but with even more destructive consequences than the virus.
Thus, the data for the first quarter are bleak, with a drop in quarter-on-quarter GDP of 5.2%, compared to the 0.4% growth in IVTR-2019. Employment in turn falls by 5% quarter-on-quarter, and if we measure it in year-on-year terms the results are also appalling, with a drop in GDP of 4.1% (when in the same period of the previous year it grew by 1.8%) and a decrease in employment of 4.2%.
Added to this is the fall of 0.7% in the year-on-year CPI. In other words, we are entering a strong recession -which could lead to depression if we don’t do things right-, massive unemployment and falling prices, which can become deflation, an element that could complicate the payment of the debt, not so much for their interests, which would continue to be low on renewals in those circumstances, but for the greater real value that their principal would have, an element that could make it difficult to return them. When scrutinizing the composition of the growth – fall, in this case – of the GDP, both on the demand side, as on the supply side, and on the incomes, the decline is very intense. For example, in quarterly terms, household consumption falls by 7.5% and investment by 5.8%, with a drop of 9.6% in investment in housing and construction.
On the supply side things are not better. All sectors fell, with quarterly decreases of 1.4% in agriculture, 2.7% in industry, 8.1% in construction and 5.6% in services, with an impact very serious in commerce, transport and hospitality, which lost 10.9%, and in recreational activities, which fell by 11.2%.
These are disastrous data, but the most shocking thing is that the Government continues without an efficient plan to get out of this terrible situation, but rather shows the opposite: incompetence in health management that extends to economic management, without providing sufficient liquidity companies to resist and condemning tourism, commerce, hospitality and leisure to the closure of a large part of their establishments. Many will not open because the imposed closure will have suffocated them, as liquidity does not arrive on time. And others, they will not be able to open because with the limitations of 30% of the capacity in hospitality, cafes and bars, and the impossibility that for two months national tourism can exist, as well as the closing without horizon of international tourism, it also condemns the hotels in bankruptcy.
If the economy does not immediately reopen at a good pace – not at the absurd level that the Executive has set in its plan – many families are going to have serious problems shortly to be able to eat and live, especially when the benefits of many ERTE’s have not yet have been paid. It is not about wasting time in the minimum customer income trials that the Government wants to put on the table, but rather about letting companies and workers produce, because, if not, with all the seriousness and sadness caused by the coronavirus in the health field, what will happen in the economic field if the government’s plans are followed is going to be even worse in the human drama in terms of unemployment, hunger and even mortality due to worsening living conditions and health services. It can not go on like this. The government has to carry out massive tests, help to take the necessary precautions, but it has to allow the economy to open up completely or ruin is guaranteed.