The turmoil in the markets has resulted in the collapse of several banks both in the United States and in Europe. However, the rain of bailouts of financial institutions at the international level would not be having an impact on the Spanish economy, according to the second vice president and Minister of Economic Affairs, Nadia Calviño. The minister, who has participated in the inauguration of the conference Wake up, Spain organized by The Spanishhas reviewed the economic situation and has pointed out that inflation will drop in March and that growth is “even accelerating” in this first part of 2023, after having finished 2022 with a rise in GDP of 5.5%.
“The OECD, the IMF, the ECB, the Bank of Spain, all of them have revised their growth forecasts upwards and inflation forecasts downwards, and I believe that this is because we have made the right decisions in recent years ”, Calviño stressed. Although the OECD raised its forecasts until setting its vision of growth in Spain in 2023 at 1.7% and effectively lowered inflation to 4.2%, it increased, instead, the forecast for core inflation to 5%. For its part, the Bank of Spain predicted last week that Spanish GDP would rise by 1.6% and that inflation would be around 3.7%. It should be noted that unlike Calviño, the entity warned about the possible impact of the banking storm on the national economy.
“This situation has already brought down some banks that had supervisory weaknesses and unbalanced balance sheets. The governor of the Bank of Spain has spoken loud and clear about the strength of the Spanish banks. Of course, we are closely monitoring the situation together with the other regulators and supervisors. At the moment, the responsible authorities have reacted ”, he said in this regard. Trusting that the rapid action to which he has referred has served to contain the problems, Calviño has focused on what he classifies as the “great challenge of the Spanish economy”: inflation.
According to the minister, everything indicates that “inflation will drop this month of March.” This same month last year coincided with the first major spike in price rises in 2022. Then, according to data from the National Institute of Statistics, it stood at 9.8% per year from 7.6% in February. That rise that it experienced then would facilitate a decrease in annual terms in March of this year. In any case, she has affirmed that inflation will move at lower levels this year, practically half of what it was in 2022.
“The measures that are already underway have a long way to go, they are being effective, but we have to remain very vigilant, especially due to the resistance to the drop in food prices,” he acknowledged. In February, food inflation stood at 16.6%. Various factors suggest that this item will continue to be high throughout this year.
In line with the rise in food prices, he recalled that next week the Minister of Agriculture, Luis Planas, will hold a new meeting with the Food Chain Observatory, continuing with a “permanent dialogue” with the most affected sectors to follow the evolution from the margins. “Right now everyone has to pitch in to try to alleviate the crisis,” he assessed.
With regard to debt, the minister has stated that, if the economy continues to advance at the rate it is doing, the debt to GDP ratio will be “below” the Government’s forecast, which placed it at 112 4% by the end of this year. In January, the debt of the Public Administrations as a whole experienced a reduction that left it at 1.489 trillion euros from 1.5 trillion in December 2022.
Calviño has announced that in the “next few days” Spain will receive the third payment of European funds, thus raising the amount received to 37,000 million euros from the current 31,000 million. Finally, the Minister of Economy referred to the good progress of foreign investment, which has risen to over 34,000 million euros with projects from companies such as Vodafone, Fujitsu, Volkswagen or AstraZeneca.
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