The bank believes that the Spanish general election is the most important event in late 2015 in the euro area
MADRID, 29 (EUROPA PRESS)
The British bank HSBC has warned of the risks they may pose elevated parliamentary fragmentation arising in the next general elections in Spain due to the rise of “radical left” party we and the “reformist” Citizens.
In its quarterly report on the European economy, the company emphasizes that political uncertainty will be the focus in Spain in 2015, beginning with the Catalan elections of September 27 and concluding with the broad end of the year in which the surveys provide almost a tie between PP, PSOE, Citizen and able.
“This uncertainty could cause a cooling of momentum in consumption and lead to a slowdown in capital inflows from abroad and direct investment, which can be a source of concern given the high external debt of Spain “alert.
The company believes that the general elections in Spain the year end are” the most important event Eurozone “in late 2015, as it is increasingly likely that an increasingly fragmented electorate, the two major traditional parties do not form the next government.
In this sense, stresses that the main new party emerged in Spain, we, has left him a new competitor in Citizens. “High unemployment, especially among young people, and greater inequality are factors contributing to the popularity of the new parties, together with the corruption in the political system,” he added.
So says it is no surprise that new parties, especially we, have gained the support of many young people who vote for the first time or those who abstained in previous elections.
For Citizens, considered which is a less radical party led training Pablo Iglesias and stresses that it has achieved the support of the electorate in the center and, unlike Can, mainly at the expense of the Popular Party.
WITHOUT PARLIAMENTARY MAJORITY.
“Whatever the outcome of the elections, the increasing fragmentation of the electorate increases the likelihood that any party may have a majority in a new parliament,” remarks the British bank.
In his opinion, this would make it difficult for any party to address some of the most important problems facing Spain, and the need to rebalance its economy towards a model of export-led growth, reduce deficits and lower still high long-term unemployment.
As for Catalonia, notes that surveys indicate that CiU and ERC will not achieve an absolute majority in the elections of September, but uncertainty still remains high and the parties to vote for independence could force the central government to take this issue more seriously.
OUTSTANDING ISSUES.
On the other hand, HSBC remember that Spain is one of the countries where inequality has increased during the crisis and the government of Mariano Rajoy has announced measures to address this problem, including tax exemptions.
However, he adds that the lack of fiscal space limits the capacity for action of the Executive, as despite the support of revenues increased growth, Spain will default the deficit targets. “This means that after the elections the new government will have to introduce more measures to cut the deficit,” he added.
Another key challenges for the Spanish economy is to maintain the downward trend in unemployment, since there are more than three million long-term unemployed and their reduction will be more difficult than before the crisis, when it was supported by the construction and public employment.
CONFIRMS FORECASTS.
The British company has remained unchanged growth forecasts made in December, as estimated Gross Domestic Product (GDP) of Spain Product will increase by 2.1% this year, then slowed to 1, 8% in 2016.
In this regard, stressed that 2015 saw a “strong start” in line with the performance of the economy in the fourth quarter of 2014. In particular, it highlights the rise in retail sales and signs of recovery in output.
HSBC expected consumption growth to remain strong while inflation remains in negative territory and unemployment continues to fall. Also, will also contribute to the availability of credit growth and return on investment, including in the residential sector, where prices seem to have bottomed out.
However, stresses that the weak industrial production remains a source of concern, since good figure for January was mainly due to energy production by the weather. In addition, the weak global demand will continue to weigh on exports, which will be supported by a weaker euro.
In this context, expects growth to slow in 2016 to see limited potential upside by structural factors : a probable stabilization of savings ratios, high structural unemployment and foreign debt. Furthermore, the need for additional fiscal adjustments also will weigh the economy next year
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