The General Council of Economists asks workers, civil servants and retirees to “be flexible”, and they expect GDP to grow by 3.9%, half a point less than the government
Inflation will remain at very high levels throughout the year, and while the peak will -for now- be reached in March (9.8%), economists predict the price will end the year at 7.1%, well above the range that the General Council of Economists pointed out a month ago was between 5% and 5.5%.
The chairman of the financial commission, Antonio Pedraza, assured on Thursday, presenting his report, that inflation will “gradually” fall, but that it will depend on external factors such as the evolution of the war in Ukraine. For this reason, he asked workers, civil servants and retirees to be “as flexible as possible”, as “efforts will have to be made” from families, businesses and government departments in an environment of high inflation and rising interest rates.
For this reason, they consider the income agreement “absolutely necessary” and that the public sector “binds its men so that the example spreads”, referring to the salary increase of civil servants – the proportion of which is not yet known – and, especially to linking pensions to the CPI, which would increase Social Security spending by $1,700 million for each additional point of inflation.
According to his calculations, the economy will grow by 3.9% this year, almost half a point below the government’s forecast of 4.3%. Valentín Pich, president of the CGE, emphasized that although Spain will grow more than the eurozone average this year, it still needs to recover 3.4 points of GDP to reach pre-pandemic levels.
Pich considers it “probable” that this recovery will reach the end of next year, while others such as France, Germany or Italy have already achieved it or will reach it this year. And while there is a lot of uncertainty, it is very likely that the reactivation of tourism will be a lever to revive the economy in the second half of the year.
As for the unemployment rate, the CGE estimates it will fall in the summer months, ending the year at 13.2%, three-tenths less than forecast. The deficit will end the year at -5.3% of GDP, three tenths more than what the government is calculating; and government debt will close at 116.5%, nearly a point above the Executive’s forecasts.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
