The governor of the Bank of Spain set as an "essential" priority to reach an income agreement to moderate wage increases and business margins, at a time when the growth rate of inflation is being controlled. Pablo Hernández de Cos affirmed that families and companies have to "internalize the loss of purchasing power" that the current rise in prices implies and warned of the danger of generating "second round effects". That salary agreement, which Sánchez demanded from the CEOE this weekend, should be multi-year and avoid automatic indexation clauses.
De Cos, who opened the appearances of public offices in the Senate in the processing of the budgets, applauded the anti-inflation measures launched by the Government. Initiatives, he defended, which have led to a "very significant reduction in the CPI", which he estimated at two points.
The Bank of Spain continues to appreciate a "slowdown in economic activity" during the winter months and a slight recovery starting in spring. The governor advanced that the regulator will not change the GDP forecasts excessively, which contemplate growth of 4.5% this year and a slowdown to 1.4% next year. In other words, Spain would save the recession but the economic levels prior to the pandemic would not recover until the first quarter of 2024. Inflation for 2023 will be 5.6%, as confirmed by Hernández De Cos.
