The Bank of Spain was once again critical of the recent pension reform and considers that it will be necessary to adopt new measures to reinforce the financial sustainability of the pension system from 2025 through the Intergenerational Equity Mechanism (MEI). And it is that the system will have to face greater spending obligations in the long term, which have not been compensated by the income side.

But the criticism does not end here, since to all of this we must add the uncertainty that may arise regarding employment, wages and competitiveness, the impact of the increases in contributions included in the reform, according to the body led by Pablo Hernández de Cos .

It acknowledges in this report that quantifying the impacts of this reform is a “complex and extraordinarily uncertain” task, although in a simulation exercise they suggest that an increase of one percentage point in the average effective rate of social contributions could generate, after four years, a drop in the number of employed close to 0.25%, “which would imply a non-negligible downward risk on the ex ante income estimates” of the pension reform.

The inflationary tensions that arose in the last stage of 2021 and that caused the central banks, including the ECB, to adopt a more restrictive tone in their monetary policy, has had its maximum expression with the last rate hike last Thursday until 3.75%.

Despite the fact that the ECB has maintained its commitment to guarantee the homogeneous transmission of its monetary policy orientation to all euro area countries, in order to avoid fragmentation in financial markets, the reality is that credit institutions in Spain are gradually transferring the increases in market interest rates to new credits and deposits, although it will not be until 2024, the maximum effects of this transfer, as explained by the general director of Economy and Statistics, Ángel Gavilán.

The pass-through of market interest rates to the cost of new household loans within the euro zone for home purchase is taking place, as a whole, in a similar way to what happened in other historical episodes, according to the Bank of Spain , although it is true that credit to companies is being carried out more quickly. However, the transmission to the remuneration of the new time deposits of households, “is being slower”, although it depends on the term than in those offered to companies.