Calviño acknowledges a scenario of global inflation "higher for longer"

The economic vice president, Nadia Calviño. / moncloa

The economic vice president defends the measures to cushion the rise in energy prices and trusts that the ECB's determination will stop "speculation" with risk premiums

Clara Dawn

The upward trend in energy prices, and its impact on inflation, has become the main headache for central banks and governments. Also from Spanish, as this Monday the economic vice president, Nadia Calviño, wanted to reflect, assuring that "the most recent news on the energy markets is not positive."

During a brief speech on the first day of the Summer Courses at the Menéndez Pelayo International University (UIMP), the Minister of Economy recalled that governments are already working with a scenario of "higher for longer" inflation at an international level. "Russian oil and gas cutoffs are intensifying the price hike," she explained.

However, he defended the measures approved by the Executive to curb this impact, indicating that these measures, among which the gas cap mechanism stands out, "are already lowering inflation between 2 and 3 points", aligning the Spanish data with the euro zone average in May.

Calviño also valued very positively the role that the European Central Bank (ECB) is playing in calming the market, which in recent days has experienced strong sessions of tension, with the profitability of the bonds of peripheral countries suffering strong volatility which has raised fears of a new sovereign debt crisis.

“It is very positive that the ECB has acted so decisively to curb speculation. His message has been very clear regarding the determination to address the progressive and necessary normalization of interest rates », he indicated in his speech.

Faced with the fear that the withdrawal of stimuli will abruptly increase the cost of debt issues, Calviño once again defended the cautious strategy of the Treasury in recent years of negative rates. «We have taken advantage of this time to reduce the average rate of outstanding outstanding debt below 6.5%. In addition, 60% of the financing program planned for this year has already been completed and only 15% of the portfolio needs to be refinanced », he explained. In other words, only that 15% would be exposed to rising interest rates.

In this context of uncertainty, the minister defended that the Spanish economy is better prepared than in previous crises to face the challenges that lie ahead, recalling that the forecasts of the main national and international institutions point to the country's economy growing between 4% and 4.8% this year.

A message with which the president of BBVA, Carlos Torres, agreed, who, despite the wave of forecast reductions for this year, recalled that "we will recover activity levels prior to the pandemic in 2023" thanks, above all, to the push expected from European funds.

“The ECB has made it very clear that right now it has to respond to inflationary pressures and what the path to do so is going to be. And also its commitment that there is a correct transmission of monetary policy in all the countries of the eurozone, ”said the manager during his speech.

At this point, he indicated that "the Spanish economy is well positioned, taking into account its better debt situation, especially in the private sector, and the lack of imbalances of past times, especially in real estate."

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