AIReF president, Cristina Herrero, in her speech at the ‘Sustainability and digitalization: levers of recovery’ course organized by APIE, reminded that the report has already increased the cost of debt by 20,000 million in the period 2022-2025. It was published in April.
Now, institution increases this cost by another “12,000 or 14,000 million” due to increase in fundingbut “it all depends on how robust the ECB’s actions in this anti-fragmentation tool are and a review of the rates”.
This estimate is based on an estimated increase of three-tenths of the implicit debt ratio of up to 2.3% and four-tenths of GDP of the fiscal burden to 2.4%.
Herrero warned that although inflation is favorable in the short run to make up for the short-term – it adds 2,000 million for each point. hurts pensions and interest costs in the medium termwith uncertainty over the international context and fiscal rules, which puts the financial situation in a weak position to recover debt.
In fact, Herrero calculates that the structural deficit has increased by half a percentage point compared to pre-crisis. insisted on the need to have a medium-term fiscal strategybecause in an environment such as the current environment “the actions of public administrations cannot add further uncertainty”.
According to his calculations, to protect 100 percent of the debt GDP The primary deficit balance will need to be reduced by a tenth of a year. and stabilizing at 80% at 0.35 points per year.
Referring to the European Commission’s recommendation not to raise current public spending above the potential growth of the economy, Herrero ensured that if implemented in 2023 the public deficit would fall below 3% of GDP that year.
AIReF estimates that if the recommendation is followed, the gap will close by 2.7% of GDP in 2023, below the agency’s (3.3%) and Government (3.9%) estimates.