Valladolid (EFE).- The governor of the Bank of Spain, Pablo Hernández de Cos, has assured this Monday that there is no risk of translation of the “financial turmoil” experienced in recent days in the United States, with the Silicon Valley Bank, and in Switzerland, with Credit Suisse, the European Union or Spain, whose banking sector has a “high resilience” with “solid capital positions”.
In an economic forum, the governor explained that in the current context, the message that the Bank of Spain has conveyed to financial institutions, especially retail ones, is that they be “prudent in planning provisions and capital”, in order to that, in the event of a negative scenario materializing, they can resist and counteract it.
For this reason, this situation of “tension” and “turbulence”, if they continue over time, will cause “a certain deterioration in confidence” and a tightening of financing conditions, he predicted.
slowdown in inflation
On the inflationary situation, Hernández de Cos has indicated that both the European Central Bank and the Bank of Spain have recently agreed on their commitment to “price stability” because “without financial stability there is no price stability and vice versa”, so that the forecast of the Bank of Spain is that there will be a “progressive deceleration of inflation” so far this year.
Specifically, Hernández de Cos has projected the year-on-year CPI for 2023 in Spain at 3.7 percent, due to the decrease in energy costs, although, on the other hand, underlying inflation will still remain “high” in the short term. term and it will not be until 2024 and 2025 when this underlying “relaxes”.
In this way, according to the Bank of Spain, the CPI will go from the 8.3 percent marked in 2022, to 3.7 percent in this 2023, while in 2024 it will remain around 3.6 percent when the prices decline. containment measures implemented by the Government, and it will not be until 2025 when this inflationary drop to 1.8 percent is truly appreciated.
The governor has also advocated for an income pact that allows “distributing the costs of energy prices” and that translates into a “reduction in real wages”, but that would necessarily have to go through an agreement between employers and workers that should not be paralyzed for an electoral period, he opined.
growth projection
Finally, regarding the growth projection, the governor has indicated that the growth of the Spanish economy of 5.5 percent in 2022 will slow down to 1.6 percent in 2023, which is, however, a forecast that is more higher than expected a few months ago; while for 2024 it will be 2.3 and in 2025 2.1 percent, all of them above the EU average.
Finally, the general director of Banco Santander Spain, Ángel Rivera, has conveyed a message of “confidence and tranquility”, since the European and Spanish financial system is “strong”, so that he has classified them as “isolated” the cases of Silicon Valley and Credit Suisse.
In addition, from Banco Santander they expect inflation to drop this year to 2 or 3 percent, at the same time that they have called for a greater execution of the European Next Generation funds, whose process is being “more complex than expected”, although He has shown his confidence that these will “accelerate”, Rivera has added. EFE
