SANTA CRUZ DE TENERIFE, 29 Apr. (EUROPE PRESS) –
The Canarian economy will grow this year by 6.3% (same percentage as forecast by the Government of the Canary Islands), compared to the 4.3% growth forecast for the Spanish economy, thanks to the pull of tourism and the services sector; however, the economic recovery of the Islands is delayed until the end of 2023 as a result of the effects of the war in Ukraine and the rise in inflation.
This follows from the Canary Islands Economic Situation Report for the first quarter of the year, which was presented this morning at a press conference by the president of the Provincial Confederation of Entrepreneurs of Santa Cruz de Tenerife (CEOE-Tenerife), Pedro Alfonso, and the consulting director of Corporación 5, José Miguel González, in charge of preparing the report.
In his speech, the president of CEOE-Tenerife pointed out that although the GDP growth forecasts for the Islands for this year are maintained, the Archipelago is suffering a significant drop in productivity that is also occurring in the rest of the country, which will make “much more difficult to get out of this situation”.
Pedro Alfonso added that to this we must add that the State, by not eliminating superfluous spending and not having more income due to less activity, is considering an increase in tax pressure, “something that neither families nor companies are willing to to endure,” he warned.
The president of the employers’ association stressed that the fiscal pressure that exists in Spain and the Canary Islands is above the effort that businessmen and families can make; hence, from CEOE they have asked the central government for a tax cut and also to reduce superfluous spending.
In this regard, José Miguel González clarified that it is not necessary to modify tax rates, but to deflate the series that already exist and adapt them to the evolution of inflation. “With an economics manual in hand, supply inflation is corrected through expansionary fiscal policy,” he remarked.
On the other hand, Pedro Alfonso alluded to the decrease in temporary employment registered in the Islands in the first quarter of the year, going from 87% to 72%, but he clarified that much of the resistance to this decrease is not only found in companies. , but by the Public Administration, which continues to maintain temporary contracts higher than the average.
Alfonso also highlighted that as covid-19 has disappeared, businessmen have complied with the practical disappearance of people in ERTE, recovering almost all of the staff, but he warned that “unfortunately” there will have to ” pull some more”, although with the mentality that “an ERTE is better than an ERE”.
Regarding the unemployment rate, the president of CEOE-Tenerife said that we cannot feel proud that the Canary Islands continue to have an unemployment rate above 20%, when the rest of the State is already close to 13%, and less than the youth unemployment rate, which is above 50%. In this sense, he stressed that the latest data from the EPA, published yesterday, have shown that the labor reform is not enough to generate employment.
NEXT GENERATION FUNDS.
In another order of things, the president of the Provincial Confederation of Entrepreneurs has expressed his concern that only one of every four euros invested from the NextGeneration funds, 27%, is reaching the private sector.
In his opinion, “it will be difficult to consolidate the economic recovery if all the money goes to the Public Administration and new business niches, new jobs and more activity cannot be generated”.
He also expressed his concern that the rise in the public deficit and in interest rates would give rise to cuts in the General State Budgets and in those of the Autonomous Community, and that this would translate into a drop or almost no investment that was already is budgeted. For this reason, he asked the Canarian Government to advance the financing or start up the planned projects because “we need to boost the economy.”
