Calviño acknowledges that the high inflation scenario will last longer

The Vice President of the Government and Minister of Economic Affairs, Nadia Calviño, defended this Monday that the Government's measures are making it possible to "cushion" the rise in prices for families and companies. However, she has recognized that "assuming a scenario of more inflation for a longer time", due to the latest data on the evolution of oil or gas after the supply cuts from Russia to Europe.

Calviño made these statements at the opening of the UIMP summer courses in Santander, where he assessed that despite the uncertainty that exists, economic growth is going to be "higher than that of other European countries". The vice-president made a brief telematic intervention at this inauguration, in which Carlos Torres, president of BBVA, also participated.

The Government's economic official has recognized that “recent news is not positive, the increase in prices in international markets is intensifying”. However, she has defended that the measures that the Executive has taken have served to "lower inflation by between two and three points" and, in this way, adjust them to the average of the euro zone. “The rise in prices is being allowed to be cushioned, but we have to deal with a scenario of higher inflation for a longer time.”

The minister has limited the possible effect of the rate hike and the earthquake that its announcement has caused in the risk premiums in the financing of Spain in the markets. "The Treasury has taken good advantage of negative rates to anticipate the normalization of monetary policy," Calviño defended. In fact, she has highlighted that 60% of the financing needs for this year are already covered and that "only a small part of our portfolio needs to be refinanced this year". Although, she has recognized that it is "a difficult period and a lot of uncertainty".

Despite this uncertainty, the Vice President of the Government has claimed that the forecasts for the Spanish economy all assume a growth of between 4% and 4.8%, which would serve to be above the rest of European countries. “All the indicators place us with greater strength to face the future”, she emphasized during her brief presentation.

The vice president has also defended herself against accusations of misuse of European funds by the Government and has claimed that "there is an environment of trust". "We have a good plan and we are advancing at a good pace in the investment and reform process," Calviño stressed. "This opportunity is not being wasted, but rather Spain is leading the deployment of funds because we have a lot at stake in it," she settled.

BBVA supports the Government's forecasts

The president of BBVA, Carlos Torres, has supported the good forecasts for the Spanish economy and sets the bank's estimates at 4.1%. "We are in a good place, despite the uncertainty", defended the entity's chief executive. “There is also a better debt situation in the private sector, there is a lack of real estate imbalances from the past and Spain has a better external financing position”, he remarked.

Thus, Torres has remarked that in this context "it is plausible that the rise in rates will not produce excessive increases in the premiums of certain countries, such as ours".

The banker focused his presentation on the levers for growth that the bank sees in digital transformation and the ecological transition. Although, he has also valued some aspects directly linked to the bank, such as the crisis that cryptocurrencies are experiencing and the investment that the entity has in one of the exchange platforms, Coinbase. The collapse of assets such as bitcoin has led to a drop in the share prices of some of these platforms, with Coinbase being one of the most affected. “Coinbase remains highly profitable, even though there has been a big swing in valuation. We are long-term investments, it is a small investment that we made back in the day”, defended Torres, who recognized that bitcoin “is a space of extremely high volatility”. Although, he has linked this problem to regulation money.

Torres has downplayed another of the problems that has surrounded the bank in the markets in recent times, the commitment to Turkey. The entity decided at the end of the year to launch a takeover bid for the rest of its subsidiary in this market, something that was not seen favorably by investors. The problems in the stock market have continued throughout the year due to the high inflation problems that the country is experiencing. Torres has vindicated this bet that, he says, is "long term." "We continue to see great potential, a population of around 90 million people, with a very young average age, a very important geostrategic position and it is a manufacturing hub for Europe, like Mexico for the US", he pointed out.

In more general aspects of the financial sector worldwide, Torres has focused on the significant volume of investments that will be needed to achieve the objectives of decarbonising the economy. Specifically, he has estimated the necessary capital at 275 billion dollars, equivalent to 8% of world GDP. Thus, he has pointed out that banks should not only "divest" in the most polluting sectors, but also promote investments in new technologies and energy efficiency. In fact, Torres defends that a "decarbonized" Europe would have had "a different response" to the Ukraine crisis.

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