In the past four years, Spain's average economic growth rate has been close to the 2012 SGP forecast , indicating that the main reason for the excess of the deficit is that the government does not keep its SGP commitments. But at the same time, it is worth noting that Spain's nominal economic growth rate is much lower than expected, with an annual growth rate of only 0.3% in the past four years, which is lower than the 1.9% of the SGP in 2012 . The phenomenon underscores the importance of nominal economic growth to deficits and debt, and shows that persistently low inflation makes fiscal adjustment difficult - something the ECB knows well. Ireland's outperformance Let 's look at the example of Ireland, where the country's fiscal situation has improved significantly, underscoring the importance of targeted economic growth. In addition to sticking to its deficit target, the Irish government has benefited from substantially higher-than-expected growth in real and nominal GDP – an annual nominal GDP growth rate of 5.5% , up from 3.4% in the 2012 SGP . As a result, Ireland's debt- to- GDP ratio reached 93.8% last year.
Which has fallen sharply from a high of 120.1% in 2012 , and is also lower than the 2012 SGP 's 117.4% . Spain, Portugal and Italy are in stark contrast. Although the debt -to- GDP ratio of the three countries has stabilized last year, it is almost 20% higher than the 2012 SGP forecast ( Figure 3). Ireland's fiscal position, while much improved, was the only exception. Many euro area countries have made little progress in recent years and their fiscal positions remain fragile. In addition, with the expected weak economic growth rate in the world, and the low willingness number list and pressure of countries to cut spending (Spain is even struggling to form a government), the current situation in the euro area is likely to continue for several years. At a time when the European Central Bank is still buying bonds and saving the market, even if the financial situation of the euro zone countries is not good, it is not expected to cause much concern - before the global financial crisis, the financial imbalances of countries were getting worse and no one vigilance. However , from the fiscal data in 2015 , it can be seen that the economic solution of the euro area will not cure the symptoms but not the root cause.
If the global economy or investor confidence encounters another major impact, the peripheral countries of the euro area may bear the brunt. See more ABglobal research reports: www.ABglobal.com.tw Or hear what AllianceBern has to say: www.youtube.com/abfunds Lianbo Investment Trust is independently operated and managed. AllianceBernstein Securities Investment Trust Co., Ltd. 1 02-87583888, No. 7, Section 5, Xinyi Road, Taipei City 110. The information contained in this document reflects the views of AllianceBernstein as of the date of preparation of the document listed and is obtained from sources believed by AllianceBernstein to be reliable. However, AllianceBernstein makes no representations or warranties as to the correctness of any information in this document, nor does it warrant that any estimates, forecasts or opinions based on such information will be realized. The opinions expressed here may be changed at any time after the publication of the document. The information in this document is for informational purposes only and should not be considered investment advice under any circumstances. This document is excerpted from a longer English document.