Funcas has warned Wednesday that the Spanish economy could lose up to 1.2 GDP points between 2025 and 2026 due to the tariff conflict. “This is a scenario of great uncertainty, which depends on external political decisions and in which the margin of error is greater. It is a self -inflicted crisis,” said Carlos Ocaña, general director of Funcas, the think tank of the old savings boxes.
For this reason, the analysts of the institution have outlined two different scenarios. In the main one does not deepen the protectionist initiatives: tariffs remain in the widespread increases of 10% and in those specific to steel, aluminum and the car. In addition, although there will be a very significant restriction of trade between the United States and China, there will be a softening of measures, especially for technological imports. And no more advances in protectionism are contemplated because the pressure of the markets avoids it. “It is not the intention of the American government to sink the markets. When great corrections have been given, they have recounted and that makes us think that they could not go much further,” said Ocaña.
Under these premises, the impacts of the tariff war are already being noticed anyway in the markets and are having a clear effect on international trade. Maritime traffic of goods was last week 19% lower than the same week ago. All this will make the Spanish economy lose in this base stage seven tenths of growth between 2025 and 2026. Even so, despite this downward review, the Spanish economy will grow 2.3% this year, three tenths less than what would be expected if it were not for the conflict, and 1.9% that comes, four tenth less. These are still high growth thanks to the fact that consumption will continue to go well for the increase in income, the high accumulated savings and immigration. And that the construction has initiated its own growth cycle that is already appreciated in all its indicators such as cement consumption or visas, although it is still far from the dimensions necessary to resolve the housing crisis. While in the preceding triennium the foreign sector had contributed a third of growth, now instead it will subtract three tenths this year and three others that comes.
This would be a relatively optimistic scenario in which it does not go further in the conflict and in which the Spanish economy maintains its own intact dynamics thanks to the fact that it does not have much direct exposure to trade with the United States. But Funcas has elaborated another in which uncertainty is prolonged by advertisements and counterparts and, as a consequence, there are some indirect effects on the consumption of lasting goods and, above all, in investment. For this, the consequences that the euro crisis had in Germany has taken. This hypothesis applies to Spain to try to measure indirect effects, and the result is fundamentally a deterioration of team investment that remains about five tenths to growth between this year and next. Hence, on the less benevolent scenario, 1.2 growth points at the biennium will be subtracted, with somewhat lower but still very positive GDP advances: 2% in 2025 and 1.4% in 2026.
-In Funcas’s opinion, the starting point of the Spanish economy before these fluctuations caused by the Trump administration is quite favorable. It maintains an expansive impulse that would have led him to review the growth of not being for the tariff crisis and that will make him face the uncertainty better than other European countries more dependent on American demand. For example, the IMF expects Germany not to grow this year.
The tariff conflict causes, in the opinion of Funcas, a double disturbance. On the one hand, a brutal commercial disruption with an abrupt and generalized increase in tariffs that return to levels of the 30s. And this is combined with a strong appreciation of the euro. “Between the two effects we have lost 20% of competitiveness with the United States,” explains Raymond Torres, director of economic situation of Funcas. While it points out that trade with the US has only a moderate direct effect on the Spanish economy.
On the other hand, there is a disturbance due to the uncertainty that is generated. And this will cause indirect impacts that are more difficult to quantify and aggravate the risks. With the tariffs to the olive that Trump imposed in his previous mandate, the production was diverted to other countries. But this time it is a global commercial war that will lead to a generalized deterioration and in which many countries will try to comply with their merchandise generating an exacerbated competition. At the moment, a financial crisis has not been seen. But there has been an impact on the transit of goods, and trust surveys already indicate a paralysis of consumption and investment decisions. In fact, the advanced data of the Atlanta Federal Reserve already foreseen a stagnation of the US economy in the first quarter.
Inflation will be moderated in Spain helped by the appreciation of the euro, the lowering of raw materials, the moderation of wages in a context of uncertainty, and the deviation of Asian products to Europe that will press on prices. Although the surplus is reduced with the exterior of Spain, it will remain widely positive. The public deficit will be reduced more slowly from now on. And the creation of employment will be about 360,000 employed a year compared to the 550,000 generated in the last two years.
