A similar 6/18  conclusion is drawn from the Labour Force Survey data for 2019 Q3 published last week, which also imply a moderation in the rate of generation of employment, to 1.8% year-onyear, down 0.6 pp from Q2 and 1.4 pp lower than at the end of 2018. Moreover, the magnitude of the fall in the rate of unemployment in Q3 – to 13.9% of the labour force – was more modest than has been typical since the start of the recovery. Against this background, the latest macroeconomic projections of the Banco de España, published on 24 September, foresee a moderation in the Spanish economy’s growth rate over the next two years, in response to the loss of momentum of domestic demand, which has already begun to be observed, in the latest period, and which has affected both private consumption and private investment. As I have mentioned already, this behaviour appears to have been fundamentally influenced by the deterioration in the external environment, as well as by the uncertainty regarding the future outlook. In any event, under the baseline scenario, which assumes that export markets will gradually recover (following their recent weakness) and that budgetary policy will acquire a neutral stance over the projection horizon, the accommodative stance of monetary policy and the improvement in the financial position of firms and households over the last few years, should allow the economy to continue to grow at slightly above its potential rate (which according to our estimates is somewhat less than 1.5%).
Conclusion To sum up, in the last few quarters we have witnessed a deceleration of the global economy, particularly sharp in the euro area and affecting also the Spanish economy. As a result, the macroeconomic projections have been revised downward in most countries, including Spain, and the diagnosis as to the balance of risks also remains on the downside, mainly as a result of the geopolitical uncertainty over developments in trade tensions and Brexit and, in the case of Spain, over the future course of economic policies. Against this background, the Spanish economy, despite the improvements achieved during the recovery, continues to face significant imbalances, including most notably the high unemployment, government debt and external debt. In addition, Spain’s capacity for future growth is constrained by its very weak productivity dynamics and the foreseeable impact of population ageing. 15  See D. Acemoglu and D. Autor (2011), “Skills, Tasks and Technologies: Implications for Employment and Earnings”, Handbook of Labor Economics, 4, pp. 1043-1171. 17/18  Given this setting, the government resulting from the coming elections must urgently take the initiative and marshal sufficient support to push through reforms to resolve the vulnerabilities still persisting in the Spanish economy and enhance its growth capacity. It is, therefore, time to put our headlights on high beam and forge a broad consensus to protect the well-being of the coming generations. Thank you. 18/18