“We maintain a high stock-market allocation because the trend is positive”

In an interview with Radio Intereconomía, Alberto Matellán, Chief Economist at MAPFRE Inversión, explained that this caution would have caused a sharp fall in other situations. This has not happened this time “because there is some support, such as liquidity and macroeconomic data that are continuing to surprise — in a good way.”

The expert still thinks that the trend is positive and that this is leading professional investors to “maintain a high stock-market allocation.” However, he also warned that risks, such as the pandemic itself, are on the rise, so it would not be advisable to increase risk exposure.

According to MAPFRE Economics, Spain is not expected to reach pre-crisis GDP levels until the end of 2022. Matellán explained, as included in the report released by MAPFRE Economics, that this is due to the structure of our economy, meaning that the “impact of the pandemic [on the economy] is more severe and lasts longer.” But he also added that the “implementation of supporting policies lags behind that of other countries.”

Despite this, there is a clear consensus that 2021 will be a year of recovery. Matellán nevertheless expects a continued rise in unemployment. “Unemployment takes longer to fall than growth. When the economy starts to recover, unemployment lags behind. But it’s not at odds with claiming that this will be a year of recovery. Let’s stick to the good stuff — that this happened because it’s a delayed variable,” he added.

Consumption will also pick up more slowly. Matellán recalled that the consumers of some ten years ago were consuming based on the stability of their future income. However, “consumption today follows a different pattern, and the importance of confidence, even more than income, has gained ground.

Recovery will be slower because, structurally, consumer confidence has fallen and changed a lot,” the expert noted.

European funds will play a key role in this recovery. In fact, MAPFRE Economics estimates that they will contribute two points to growth between 2021 and 2023. As Matellán has been saying for months, “Now is the time for fiscal policies rather than monetary ones.” “European funds have sent a very positive message, namely Europe’s unity. What’s more, these are funds that cannot be spent in a futile manner. It will of course depend on how each government implements them both in terms of efficiency and time. They are key to supporting the recovery in 2021,” he concluded.