Andrew EdePalma08/08/2020 02:39
TW
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Earlier this week, Prime Minister Sánchez stated that economic recovery has already started, that it will be at a faster pace in 2021 and accelerate further in 2022. By 2023, there will be “better, more competitive and more productive growth”. Well, let’s hope so, and let’s hope that the prime minister has good reason for saying all this (one reason of course being the EU reconstruction fund). Sánchez is far from alone in predicting a future which is almost impossible to predict. Forecasts of general economic recovery and of the specific recovery of tourism have come thick and fast, and they tend to all have different timeframes.

This crystal-ball gazing isn’t as straightforward as in the past, as the dynamics of the situation are different, almost unknown, which was why on Tuesday I highlighted the pointlessness of comparisons with past events, e.g. the financial crisis, and therefore drawing on these events to foresee the future.

Mervyn King, the former governor of the Bank of England, has concluded that studies and calculations of the immediate economic future are worthless. The uncertainties make them worthless. I’m grateful to Jaime Amador of Preferente for having drawn attention to an interview in which King made his observations, as they confirm what I suspect, which is that there is an abundance of economists (and others) churning out forecasts that cannot hope to be anything other than guesswork. The Balearic government appears to now appreciate this. Making forecasts are “very difficult”. Quite.