HE Bank of Spain It stipulates that: Future wealth outlook for families and businesses will be ‘relatively positive’ Given the progress in economic activity and the market’s expectations of a decline in interest rates.
However, the referring organization Pablo Hernandez de Cos In his report on the financial situation of households and companies, he warned that the development of these sectors will be determined by the macrofinancial context.
For this reason, the Bank of Spain, in case some negative scenarios regarding economic growth occur, deterioration may occur financial situation of households and companies.
Similarly, the agency warned that if monetary policy rates are cut by less than the market currently expects, there will be less relief from fiscal pressure on debtor institutions.
According to the report published on Wednesday, the financial situation in the second half of 2023 houses and companies Improvement in terms of income growth, Reduce debt and increase the value of your assets.
There are two basic conditions for this evolution: On the one hand, economic growth continued to create jobs and allowed for increases in wages and business incomes; On the other hand, the tightening of monetary policy by the European Central Bank (ECB), which continued to increase interest rates until September, continued to make new financing more expensive and weaken credit flows.
Interest rate increase affects “somewhat”
Thus it is estimated thatCumulative increase interest ratesAs the quality indicators of bank loans show, adverse developments during this cycle may have slightly increased the proportion of vulnerable indebted households, which, thanks to the increase in income, was also reflected in the limited realization of risks.
In the case of companies, the positive development of corporate profits is also It would limit the increase in the percentage of companies with high financial pressure in 2023This will be a very moderate rate and the percentage will change very little until 2024.
As a result, the agency predicts that indebted households and businesses will increasingly begin to experience a certain reduction in debt service-related expenses.
Improvement in the fragility of companies in 2024
According to the report, the most negative effects of high interest expenses will be recorded in 2023 and will remain limited. It is expected to take place in 2024 some stability or improvement The job is vulnerable.
According to the Bank of Spain, this can be linked to the development of interest rates because, according to the assumptions used, the transmission of monetary policy to financing costs would have been practically completed in 2023. Finally, this impact will be very small considering the employment weight of the affected companies.