Premature calculation

Economy minister Nadia Calviño bounded out of Tuesday's cabinet meeting full of cheery predictions for Spain's future. She seemed to have champagne-worthy news about all the major indicators of fiscal wellbeing - employment, budget deficit, GDP expansion and public spending. As with all such announcements, though, the real story is behind the figures: without unpacking and contextual detail, the numbers by themselves can be misleading.

Calviño was especially positive about Spain's employment level, which was already problematically low before the pandemic and has fallen since. But the leading deputy prime minister said on Tuesday that the number of employed Spaniards could go back to pre-Covid levels this summer, fuelled by the creation of 233,000 new jobs in June.

This number obscures the extent to which seasonal work is contributing to an apparently vastly improved situation. In June this year, there were almost 250,000 fewer people in Spain without jobs compared to the same month in 2020; but nearly 150,000 of those new positions were temporary contracts for seasonal gigs. Because of the centrality of tourism to its economy, Spain's unemployment rate dives every year at the beginning of summer (last year excluded), only to rise again when international tourists return home in the autumn.

As regards GDP expansion, Spain looks set to climb all the way from a record slump - last year the economy shrank almost 11%, a decline not seen since the Civil War - to being the developed economy that will expand the most in 2022. Calviño announced expected growth of 7% next year, higher than forecasts from the IMF and European Commission, but heavily dependent on measures taken to deal with successive waves of Covid. Still, compared to the economic disaster that was 2020, any uptick is welcome.

If Calviño's to be believed, the rest of this year and the next are going to see a giant public spending bonanza in Spain. Buoyed by EU loans and grants deceptively described as "recovery funds" (a lot of them are actually funding digitalisation and green projects within multi-billion-euro corporations), the Socialist-led government has earmarked almost 200 billion euros for 2022, even more than last year and the highest amount on record.

One wonders where the rest of this enormous budget is coming from, how and when the Brussels-issued loans will be paid back, and whether large-scale borrowing will hamper another of the government's lofty targets - pulling off the greatest deficit reduction in Spain's democratic history by the end of 2022. To do any of that, it's also got to survive a full term; and given that Pedro Sánchez has just been found to have imposed an illegal lockdown on the entire country last year, that's surely not a given.

Uncork some cava, by all means, but save the good stuff.