Spain will repeat in 2023 as the largest economy in the EU with the most inflation: 4.8%, twice as expected

• The OECD lowers its growth forecast for Spain by 1.4 points and raises its average inflation forecast by 5 points

Inflation in Spain was going to drop to around 2% in 2023,

which was going to place the country as one of the European Union states with the lowest price increases next year.

This was predicted by the Government, the European Commission, the IMF and the Bank of Spain, but that was

against Russia.

Now, the

warns that

, triple what was forecast in December and the highest rise among the EU powers.

"

that the

experienced by much of the world economy in 2021 and early 2022

. The additional boost to food and energy prices and the worsening of problems of the supply chain imply that

consumer price

and

than expected," warns the OECD in its latest economic projections report, published this Wednesday.

Prices will rise again in Spain by another 4.9%

next year, an increase that will be added to the one already registered this year -8.1% on average- and that will further impoverish families and make companies less competitive .

In other countries the increase in prices will be somewhat more moderate: in

they will rise by

;

in

,

;

in

,

;

in

,

;

in

,

, and on average in the

as a whole,

.

The new OECD inflation forecast triples

what they had in December, when they expected inflation to rise by

and doubles what the rest of the organizations had presented for Spain: the

forecast in May that inflation would drop to

in 2023;

the

in its macroeconomic projections placed it at

and the

had even placed it at

Other study services such as

had projected an average price rise of

for next year;

was betting on

;

the

pointed to

, at

;

and

, at

.

All very far from the new OECD forecast.

This estimate also clashes head-on with the

presented by the Government in its 2022-2025 Stability Program, since while the Executive foresaw that the

(an indicator used to measure the evolution of prices that takes into account all products of the economy and not only those of the consumer basket, such as the CPI)

in 2023, the

itself forecasts that the

will rise by

next year.

For this year, the Government expected the deflator to rise by

on average, a figure in which it coincides with the OECD, which puts it at

The problem of expectations

Inflation

a word that appears

in the 231-page document presented yesterday by this institution and it is its main concern, since it is precisely what will cause a

in many countries and a sharp slowdown in increase.

In

, private consumption will only grow one tenth this year, which has led the OECD to lower

growth to

, compared to the 5.5% it was considering in December.

"

We estimate global growth to be

in 2022 - up from 4% we projected last December - and 2% in 2023.

in OECD countries in 2022,

than what we previously projected.

High inflation around the world is eroding real disposable income and household living standards, and in turn consumption.

The uncertainty deters business investment and threatens to curb supply for years to come.

At the same time, China's covid-zero policy continues to weigh on global prospects, dampening domestic growth and disrupting global supply chains."

Although they admit that inflation will help reduce the weight of the debt -and also of the public debt-, it also

, and can affect the profits of companies and the

“

is a burden that

between people and businesses, between profits and wages. Governments also have a role to play by targeting support for the most vulnerable to offset rising food inflation. and energy", they claim.

The

has been the

to forecast such high inflation for next year, which poses a risk in the face of agents'

, since if the idea that prices will rise sharply next year is consolidated that will condition the behavior of individuals and companies.

To avoid

, expectations are key, since if a

assumes that next year the price of its intermediate goods will rise again by an average of 5%, it will have

than if it thinks that prices will moderate.

The same thing happens in the labor market: if an

believes that next year prices will continue to rise, he will have

The main reason is in the war and, more specifically, in the

approved against Russia: "although alternative supplies can be found on world markets at higher prices and shortages are avoided, as assumed in the baseline projections

and weaken growth, especially in

."

They further warn that "

EU embargoes on

and

from Russia are likely to drive

global energy

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