• Crisis The Government's promise to pensioners will cost 10,000 million more while the country borders on recession

"

We have doubled the rate of inflation

."

The new General Director of Economy and Statistics of the Bank of Spain, Ángel Gavilán, has been very clear and concise in presenting in this way the main result of the new forecasts of the institution, which effectively leaves a very high revision of the expected level of prices : from the average 3.5% targeted in December, to the 7.5% targeted today.

A dizzying rise that reflects the runaway CPI suffered by the population.

This situation, moreover, will continue to be so at least until July.

which is when the Bank of Spain expects prices to begin to contain.

In other words: that

citizens will continue to suffer from high inflation for

at least another three months.

"

The rates will be relatively high until the summer of between 9% and 10%

", explained Gavilán in the presentation of his first forecasts after Óscar Arce, his predecessor in the post, was signed by the European Central Bank ( BCE) as Director General of Economy.

And "as of the third quarter, inflation is going to moderate, and this gradual moderation will take us to a rate of 2% in 2023 and 2024," he added.

The new BdE forecasts also contain

a significant reduction in growth forecasts

as a direct consequence of the war.

The Spanish economy will grow 4.5% this year, which is nine tenths less, and 2.9% in 2023, one point less than forecast so far.

In 2024, and as a result of the "rebound effect", the GDP will rise seven tenths more, up to 2.5%.

The agency does not expect negative growth to occur in the coming quarters, although it does expect very moderate upturns.

After the 0.9% estimated for the first quarter of the year,

the economy will barely advance 0.1% in the second quarter

, to rise to 0.4% and 0.7% in the following quarters.

Last week, Funcas offered a similar vision and pointed out that the Gross Domestic Product (GDP) will not go into negative territory "

by the hairs

".

All this will cause the recovery of pre-pandemic levels to be delayed until the third quarter of 2023. Gavilán has stressed that it is "a temporary delay", because at the end of the time horizon the figures converge, that is, that in 2024 will reach almost the same point as was planned before the Russian invasion of Ukraine.

But, at the same time, the head of the Bank of Spain has stressed that "

this delay has many implications for vulnerable companies and households

".

13,500 million in pensions

At the press conference to present the new forecasts, Gavilán was asked about the impact of indexing pensions to the CPI.

His estimate is that

for each point of increase the bill increases by 1,800 million

euros, so, if that average inflation of 7.5% is taken into account, the result is that the disbursement would be 13,500 million euros .

Conforms to The Trust Project criteria

Know more