Governor of the Bank of Spain, Pablo Hernandez de Kos, He voiced his concern about the “generalization” of inflation in the form of a rise in ever-increasing prices to more products and services in the consumer buying basket, starting with energy and food. “The duration of this phenomenon may cause indirect effects to occur more intensely and more intensely. second round”The Governor, during his appearance at the Congress of Deputies this Wednesday, annual report of the Bank of Spain.
To avoid the dreads”spiral Despite the failure of negotiation between unions and employers, Hernández de Cos once again advocated the need for an income agreement—where workers and employers committed to smoothing wages and benefits—and wanted it to include pensions and benefits. Specifically, what the Annual Report recommends is that “buyers’ purchasing power is guaranteed. pensions least“and these will increase in 2023 relative to the average inflation recorded in November 2022 (around 6% expected); however, for the remainder of pensions, the Bank of Spain proposes a more moderate increase, which is what he is doing. Hernández de Cos Economics “All citizens should contribute to the income agreement without discrimination, which is why I put a pension here,” he told his commission deputies.
“Today, we are poorer than before the rise in energy costs. There is a loss and it is inevitable. All we can do is distribute it,” said Hernández de Cos. ”
The governor expressed his concern about the increased participation in collective bargaining, especially regarding wages. purchasing power guarantee clauses Trying to ensure that the increase in salaries is adjusted to the evolution of inflation. In 2007, 75% of contracts contained such clauses; By the end of 2021, this rate had dropped to 17% and increased to 30% by March 2022. According to De Cos, such a substance would have a “second-round” effect and feed into increased inflation risk; Therefore, he insisted on avoiding its inclusion in collective agreements and using it as a reference in negotiations for salary increases. “expected core inflation“, that is, an estimate of inflation data that excludes the most volatile energy and unprocessed food prices. These wage change guidelines should be accompanied by clear commitments to moderate job margins,” the agency adds.
The Central Bank of Spain will update its forecasts once again on June 10, following the growth and inflation forecasts for the Spanish economy published in April. De Cos said its 4.5% growth forecast for this year will be “cut by a few tenths” while also easing the current 7% inflation forecast for this year, though it may correct the underlying inflation forecast upwards. inflation.