Gavilán asks for fiscal stimuli and to eliminate obstacles to companies to raise productivity
The Bank of Spain recommends expand tax incentives and eliminate bureaucratic obstacles to business activity as part of his recipe for structural reforms to raise productivity in Spain. A combination of these necessary structural measures with the implementation of European Next Generation EU funds would raise the potential growth rate of the economy, as explained by Ángel Gavilán, General Director of Economy and Statistics of the entity, within the framework of a conference organized by Cepyme.
Gavilán recalled that in the last two decades the growth rate of productivity in Spain has been very low and much lower than that of neighboring countries. In part this has been due to the type of economic sectors that have more weight in the activity, but not only, since the lack of productivity also extends to other branches. In his opinion, low productivity “It is a symptom of many anomalies that the Spanish economy has been dragging for a long time”. Among them, he has focused on the size of the companies (with a predominant weight of the smallest).
In this sense, go It is essential to eliminate all obstacles and tax barriers that prevent companies from gaining size. “It is necessary to boost productivity for the company to gain size,” he pointed out, while stressing the need to “improve the regulatory framework.” He also considers essential “redesign” tax incentives for innovation and promote market unity, so that the volume of regulation that affects companies is not so high and complex.
Cumulative drop in productivity in SMEs of 7.5%
In the same days, the president of Cepyme, Gerardo Cuervahas explained that the productivity of the Spanish SMEunderstood as sales per employee adjusted for inflation, has registered an accumulated fall of 7.5% between 2017 and 2021, as stated in the latest SME Situation Indicator recently published by the Confederation. Lower business productivity affects the overall productivity of the country.
In fact, Cuerva has pointed out that the Spanish economy has registered a continuous loss of productivity since 2018 that is due, among other reasons, to the strong increase in costs that small and medium-sized companies has been assuming in the last year (24%) due to the 6.6% rise in labor costs, more than 50% in supplies and more than 100% in energy costs. It also responds, in his opinion, to the lack of investment, the rise in credit, the low bureaucracy, the high absenteeism, since the environment in Spain is at times “hostile” towards business activity.
Better to allocate European funds well than faster
The General Director of Economy of the Bank of Spain has also pointed out the problem that the country has in terms of human capital, given that he sees a training deficit both at the level of employees and employers in relation to other European countries. “This also conditions productivity”, he has remarked, the ability to innovate and to make that innovation more profitable.
Ángel Gavilán has also focused on public-private investment which, once again, places us below the European average and has highlighted the arrival of European funds. In this sense, he has clarified that, although there is a certain delay in the pace with which these funds are being executed, the Bank of Spain does not consider “the greater or lesser speed” so important, but rather that the funds are allocated correctly.
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