Article published by Mr. José Carlos Francisco in La Gaveta Económica in the October 2016 issue.
After the crisis of our lives (2008-2014), economic and social conditions have improved. More employment, less unemployment and more income, although all of this is very insufficient to reduce unemployment figures to moderately acceptable rates (24% in December 2016-Corporation Forecast 5).
The Canary Islands' GDP growth of approximately 6% in 2015 plus 2016 is largely caused by three external factors: crisis in competing tourist destinations (Tunisia, Egypt and Turkey), low oil prices and abnormally low interest rates. We do not have the capacity to influence any of them, the same thing that now blows in favor, they could blow against.
Obviously, life and its future are uncertain and risks lurk in any circumstance. However, the current scenario in its political and economic definition is especially uncertain. The American elections in November, the German and French elections with potential leadership changes and populist risks, the beginning of BREXIT actions and especially in our country, a government in office. To finish seasoning the stew (hopefully not in a messy way), the Canarian Government, when I write these lines, is faltering in its pact structure.
All this uncertainty does not help the necessary recovery, and only puts obstacles in the wheel of the economy. We have already anticipated the consequences of BREXIT and “no-government”. In one case 0.5% of GDP and in the other 0.6%.
In any case, for the Spanish and Canary Islands economy, the consensus of specialists is that in 2017 growth will decline to figures closer to 2% than 3%. This is not traumatic, if it were not for two facts. Firstly, lowering unemployment rates requires growth rates above 3% and for several years. Secondly, the public sector economy continues to be worryingly out of balance: how is it possible that a country that is growing at 3% (close to its potential) has a public deficit close to 5%?
And solving both problems depends a lot on public decisions, which unfortunately do not go in the right direction or rather, they do not go in any direction.
