INE hits out at experts who warn of underestimation of GDP: “There will be no meaningful review”

Spain’s economy has been one of the worst performers in the EU’s economic growth over the past four years. The leaders of the People’s Party (PP) and the far-right formation Vox have not stopped insisting on the catastrophe of the evolution of GDP (Gross Domestic Product) since 2020. Growth and a labor market approaching a record 21 million Social Security benefits.

This economic catastrophe was one of the main blows of the right against the coalition government in the May-June 2023 election cycle. Then, national accounts data from the INE (National Institute of Statisticians) partially supported the pessimism, even though many positive signs (notably the strength of the labor market and tax collections) directly argued against it.

From 2021, the experts Francisco Melis and Miguel Artola began to warn about the underestimation of GDP by the INE in a series of articles that they publish and continue on due to inconsistencies with other statistical sources (fixed profits). Companies in the tax agency, on wages, working hours or even revealed “negative fraud” in VAT, i.e., according to national accounting, more tax was paid than was spent).

Different voices joined them. They all realized that the INE was facing an “unprecedented scenario” after the hibernation of activity due to COVID and the subsequent intensive recovery, which supported also the unprecedented public protection of the incomes of families and companies, thanks to various measures. Executive.

It is true that “the extreme sensitivity of the Spanish economy to the international mobility of people [por la importancia del turismo] This made us fall more in prison,” recalled economist Ignacio Ezquiaga. But it is also true that the recovery has been stronger, largely because of a faster decline in historical energy inflation due to Russia’s invasion of Ukraine.

One of the big statistical problems is that part of this overhaul was not reflected in GDP until September 2023, when the INE carried out its most significant upward revision of the level of economic activity (especially in 2021) and promoted the recovery from the shock. of COVID until the third quarter of 2022, which will eliminate the relative catastrophe with the rest of the EU. Overall, the updates added 1-tenth more activity in 2020, 9-tenths in 2021 and 3-tenths in 2022.

1.4 percentage points higher, for now, as different statistical sources continue to disagree and, according to different experts, GDP may still be overestimated. This Wednesday, at the conference “National accounts after the pandemic”, held in the Congress of Deputies, gathered representatives of some of the main economic institutions of our country (Bank of Spain, AIReF and INE itself), scientists and trade unionists will decide on this issue.

In fact, in September 2024, the INE will publish another in-depth update of national accounting for the last 5 years. Although the representative of the statistics of that day, María Antonia Martínez Luengo, Director of National Accounts of the institution, poured cold water, saying: “We do not have numerical results yet, but a priori and I probably regret providing this information. We don’t expect the level review to be significant.”

The issue is crucial because the underestimation of GDP leads to debates such as productivity or work efficiency (measured in macro terms as GDP divided by working hours) and the threshold that exists to reduce the official working day in Spain as a coalition. The government did. or distorts the debt ratio (which also compares government debt to GDP). Or, similarly, it affects the fiscal pressure (taxes paid on economic activity), which is key to reforming our tax system.

Initiated by Carlos Martín Uriza, President of the Congressional Budget Commission and Spokesman for Economy and Finance of Sumatra, the participants of the conference, for the most part, agreed that the National Accounting Measurement INE needs more resources and also that the new behaviors of economic agents (payments or online services, for example), many The digitalization of the sector or the results of the ecological transition should be included in the various indicators added to GDP.

“We have a system [de medición] It was developed 80 years ago and, with improvements and adaptations, it must face a reality that has changed significantly,” laments Juan Manuel Rodríguez Pu, professor at the University of Cantabria and member and former president of the European Statistical Governance Advisory Board. INE.

The economic historian Miguel Artola put forward several suggestions: “More efforts to use administrative records and explain the differences. On the other hand, any changes in the evaluation procedures should be detailed for public opinion. In addition, the INE should publish a manual. – An inventory of the annual reports or a better integration of the INE, other public between organizations (Social Security, Bank of Spain, Tax Agency…) and the academic community.”

“There are countries that have gone further and are much more dependent on administrative records than sample data. [encuestas]”Added Juan Manuel Rodríguez Pou. “I am certainly skeptical about the modernization of the national accounts data production systems. “I think we can make much more progress,” he concluded.

Source: El Diario

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