The Economic Observatory of the University advocates carrying out a series of structural reforms to increase economic growth
MADRID, 23 Mar. (EUROPA PRESS) -
The Economic Observatory of the Francisco de Vitoria University (UFV) maintains that, despite the improvement in some indicators, the Spanish economy maintains a deceleration path, at the same time that the country is approaching a stagflation scenario, for which reason it has considered that the scenario "cannot be described as optimal".
This is one of the main conclusions of the first quarterly report on the situation of the Observatory, which has also focused on the current disturbances, which could intensify the deterioration of the economy, with "particularly virulent" consequences due to the large accumulated imbalances that Spain has
Although some indicators have behaved better than expected, this has been due to "huge" public spending that has mitigated the deterioration at the cost of preventing the reduction of the public deficit.
For its part, the contractive policy of the European Central Bank (ECB) will impoverish economic agents "significantly" and reduces the consumption of the population as a whole, as well as the ability to save, essential to be able to channel it towards investment.
In the same way, in the public sector, although the debt will be worth less due to inflation, the cost of its interest will mean a higher effort in the short term, draining resources for essential services or increasing debt "even more".
In this context, the UFV Economic Observatory has considered that the Spanish economy needs a series of structural reforms to raise its potential growth, increase its productivity and competitiveness, put an end to the negative differential in the labor market and attract investment.
Among others, the institution has indicated as a priority that tax figures be reviewed to achieve a reduction in the tax burden of economic agents, as well as to eliminate regulatory and market rigidities to increase the potential growth of the economy.
It has also been urged "not to delay any longer" the fiscal adjustment, since the imbalances that can be generated if we continue on the path of an incremental deficit is that of a debt "with difficulties to be financed."
Finally, the UFV has expressed the need to tackle a pension reform with determination that guarantees its sustainability and reverses the current and future imbalance, while at the same time calling it "essential" to generate a favorable climate for business activity.
