Listening to the comments of David Taguas, secretary of state and director of the prime minister of Spain’s economics office, on the country’s economy is scary – a bit like attending an econometrics class and being expected to prepare for an exam. Luckily, Spain’s top economist knows about more than just data, and he is also an extremely amiable man, who is passionate about his country.
“Spain is a very dynamic country,” he says. “In the past year, I’ve been many times in other European capitals and I haven’t seen the same dynamism. Here, in Madrid, people work all the time; there is dynamism in the street.”
Mr Taguas’s optimism is based not only on an enthusiastic national spirit, but also on hard economic figures. The economy grew in the past 10 years by more than the average for EU countries, he says. “Spain has grown in the past 14 years, in a unique cycle, a very positive cycle, at an average rate of 3.3%. I think that Spain’s potential growth is about 3.2%, close to the US’s. Euro countries have a potential growth rate a bit lower than this – about 2.2%.”
Mr Taguas joined prime minister José Luis Rodríguez Zapatero’s government late last year, replacing Miquel Sebastián, who took on the challenge of competing against Madrid’s mayor, Alberto Ruiz-Gallardón, in the city’s elections this May, but did not succeed. Previously, Mr Taguas put his knowledge and passion at the service of Spanish bank BBVA.
Author of many books on macroeconomic models, fiscal policy and regional growth, Mr Taguas is particularly proud about a recent publication of his: the Spanish government’s first economic note, the Informe Económico, which details the current status of the country’s economy and focuses on key economic topics in an effort to increase openness and transparency in Spain’s economic programmes. “Just the fact that the Informe was made is an important step,” he enthuses.
Mr Zapatero’s economic director also has encouraging views about FDI inflows into Spain. “There is foreign capital that supports us,” he says. “Expectations of Spanish economic prospects are very high. I am sure that Spain will continue to be very attractive for foreign investors. I am also sure that the country will continue to invest abroad and that Spanish companies will be more and more international.”
Mr Taguas maintained his optimism during the first signs of a decline in the recently booming construction market in the country. In April, when the first construction stocks declined, he said that the chances of a hard landing in the sector were nil and that he did not even know what people meant when they talked about risks.
Some commentators are concerned that people have come to regard Spanish property as risk free, leaving themselves overexposed to corrections in the market. Others who are less alarmed simply believe that property in Spain may be expensive in historical terms but not necessarily over-inflated.
No doubt, Spain and its investors will be hoping that Mr Taguas’s forecasts are correct.