From optimism to shock with reality: inflation contradicts the Government's forecasts

The Government's promises regarding the control of runaway inflation, which has picked up again in July according to the latest data published by the INE, continue to fail to materialize in Spain, with the index at 10.6%, the highest since September 1984. The forecasts made by the Ministry of Economy, led by the first vice president Nadia Calviño, have been characterized by a constant downward revision, as the data has worsened. Since the data from the CPI (Consumer Price Index) for March confirmed that the situation was serious, the ministry has been lowering its optimism until it recognizes that the slowdown in prices will not arrive until 2023. 1 April 2022 Historical rise in prices in March After the CPI data for March 2022 was made public, with a historic rise to 9.8%, the First Vice President and Minister of Economy, Nadia Calviño, described the data as "unacceptable" and added that the Government "does as much as possible so that it starts to go down.” It was then that the recently announced banking and electricity taxes began to take shape. At the end of the month, with the data for April showing a drop in the CPI of 1.5 points to 8.3%, Vice President Calviño stated in a radio interview that Spain would not reach 10% inflation, since there had been "a significant drop in energy prices." At that time, the Government forecasts indicated an average inflation of 7.5% by the end of the year. May 2, 2022 More prudence without losing optimism On March 10, Vice President Calviño once again spoke about inflation during her speech at the Madrid Leaders Forum business forum. On that occasion, the Economy Minister stated that the Government was confident that inflation would never come close to 10% again, without closing the door to new spikes. "Everything points to the fact that we have already left behind the peak of inflation in March, but it cannot be excluded that there will be new spikes in inflation because the causes are still there and are of a global dimension," she indicated. June 3, 2022 Inflation exceeds 10% With the inflation data for June, where Spain once again registered record figures with the CPI at 10.2%, the Government's forecasts failed again, ending the optimism shown in previous months. Related News standard No The Spanish economy grew by 1.1% in the second quarter despite the blow from inflation Daniel Caballero The recovery of national demand, pushed by the reactivation of tourism, pulls up the statistics The thesis that the price rise was a circumstantial episode proved to be wrong. The forecasts that the CPI would drop after the Iberian mechanism to limit gas were not fulfilled, and the Executive's speech turned gloomy. "We have to work with a new scenario of higher inflation for a longer time at the international level," Calviño said, acknowledging that inflation is a long-term problem.

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