The macroeconomic forecast underpinning the Draft Budget also appears to be considerably in line with the projections made by other analysts for these same variables in 2020, especially considering the high level of uncertainty. Thus, in the Consensus Economics Forecasts panel published in mid-October, the analyst consensus pointed to a contraction in GDP of 12.1% and a budget deficit also of 12.1% in 2020. 14  A second noteworthy aspect of the macroeconomic forecast accompanying the Draft Budget is that it expects GDP to grow by 9.8% in real terms in 2021 (10.8% in nominal terms). This is assuming that some € billion will be available from European funds in 2021 (around 2.4% of estimated GDP for 2020), with a positive impact on the rate of growth of GDP in that year of 2.6 pp. As I indicated earlier, the Banco de España’s latest projection exercise did not include the potential positive impact on activity of the funds that the European Union has made available to Member States, through the NGEU programme, to support the ongoing economic recovery and structural transformation. In consequence, in order to use the Banco de España’s projection scenarios as a benchmark for comparison, the GDP growth estimate for 2021 in the macroeconomic forecast underpinning the Draft Budget must be considered having discounted the impact of the projects financed through the NGEU programme. This gives GDP growth of 7.2% in real terms (8.1% in nominal terms).
The latest IMF forecasts released in early October illustrate the extraordinary impact the pandemic has already had on economic growth globally and the incomplete nature of the ongoing recovery. 1  In particular, the baseline scenario of these forecasts suggests that, following growth of 2.8% in 2019, global GDP will shrink by 4.4% in 2020. This contraction will be more acute across the advanced economies than in the emerging countries (with declines of 5.8% and 3.3%, respectively) and, among the former, it will bear down particularly on the euro area, where output is expected to fall, according to the IMF, by 8.3% this year. In 2021, the IMF expects activity to pick up relatively strongly in virtually all economies, entailing growth of 5.2% globally. However, in most countries, despite this recovery, the level of GDP in 2021 would still be below that recorded in 2019 before the outbreak of the pandemic. The gap in the advanced economies as a whole would be about 2 percentage points (pp). In the case of the euro area, the contraction in economic activity has been across the board in the year to date, despite the partial recovery posted in the summer months following the easing of the lockdown measures deployed in the first half of the year. Euro area GDP in Q3 was thus still 4.3% lower than in 2019 Q4. In the four biggest euro area economies, the loss in output was more marked in Spain (9.1%) than in Italy, France or Germany (4.5%, 4.1% and 4.2%, respectively).