There was fog. Thick. But a shy sun is intuited. With this analogy, Robert Casajuana , economist and director of institutional investments of SLM, expresses that markets can already take advantage of “tangible situations” and that this is always the most decisive for an investor.
The formation of the Government in Spain, with Pedro Sánchez , with ministers who show an anchor with the European institutions, and with Unidos Podemos, which wants to demonstrate that it can govern with the conditions of the European Commission, is not disturbing. And neither does Brexit, “because it will be negotiated, because now the British Government is clear about it.” So? What worries on the horizon is Iran, is the possibility of an international blockade, which triggersThe price of oil .
There are some shadows, of course. But the decline in GDP growth in Spain does not seem to be pronounced. Axesor analysts point out , indicating that the Spanish economy could have closed 2019 with a growth of 2%, one tenth below the Government’s forecast, but still with a certain vigor. What Axesor expects is that, although domestic demand in 2020 will moderate its growth, it will continue to be the main driver of the economy, and that household income will continue to grow at nominal 4% rates, due to higher wages, which could compensate for the slowdown in job growth.
Brexit, more controlled
All of that is true. Intensity has been lost, but the clouds have moved away. It is also indicated by IG analyst Sergio Ávila , understanding that the dangers have been limited. One of them, the main one in the last two years, has been Brexit. And what you have now is a confirmation: British parliamentarians have passed a law, last Thursday, which will allow the United Kingdom to leave the European Union on January 31, ending a three-year period of conflict, in the that nothing could be foreseen, and where the traumatic rupture has been about to happen on several occasions.
Another important point has been the decision of the Chinese Government delegation to sign first agreements with the United States, in the coming weeks, to stop the trade war that has harmed, especially, the European Union, and its main economic locomotive, Germany .
In recent days, the lax monetary policy of the European Central Bank and the flow of money in the markets has allowed different business operations: CaixaBank placed 1,000 million euros in senior senior debt; Brussels approved the purchase of 60% of Allianz Popular by Santander; Red Eléctrica made a bond issue for 700 million euros, with a maturity of eight and a half years; and Cellnex, among other business operations, placed 450 million euros in seven-year bonds to refinance.
What analysts find is that there are desires to invest, to move capital, and that the circumstances, still complicated, are better now than a few months ago. The concern is Iran, but it is also understood that there may be “a certain tetralization,” as Casajuana points out , because neither the Iranian Government nor the president of the United States, Donald Trump, wants to start a war race that ends up involving the explosive region of Middle East
What about the lowest radar? An important indicator, in the case of Spain, is offered by retail sales, which in November increased by 0.5% per month. It was not an important jump, but the rhythm was changed, after a downward trend, which had been observed since May. And in year-on-year terms that growth has meant 2.9%.
But as has happened in Catalonia, with the so-called opportunity cost, the problem of the Spanish economy as a whole is the potential truncated by the lack of reforms, product of political paralysis. Apart from the international situation, and those shadows that have been cleared, the problem is that there are no structural reforms since the first years of Mariano Rajoy’s government, according to all the analysts consulted.
Axesor points it out as a determining issue: “One of the difficulties of the Spanish economy lies in raising its potential growth; parliamentary paralysis has stopped the structural reforms, which, when they are put in place, will take several quarters to see results. If we consider that the potential growth of the Spanish economy is around 1.5%, by 2020 it would be practically growing at that potential rate. From there, it will become harder to grow back above potential without structural reforms. ”
The point is that it will depend, to a large extent, on what is done in domestic politics, on the possible agreements reached in Congress. That will add more or subtract than the international situation, which leaves the markets with relative optimism, with less nerves than just a couple of months ago.