Bank of Spain denies government: inflation started long before the war

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Hernández de Cos points out that the initial factor driving the growth was a “rapid reactivation of demand” after the sanctions, and that the starting point goes back to mid-2021.

Governor of the Bank of Spain
Bank of Spain Governor Pablo Hernandez de Cos.Europa Press

No, the high inflation suffered by Spain’s economy was not uncovered by Russia’s invasion of Ukraine and the aftermath of the war that started this movement as a defense by the government. This was something that could have been eased or even confirmed, but if there was any doubt, the Bank of Spain has clearly indicated that the price rise started much earlier. mid 2021In particular, and after the restrictions imposed during the pandemic have ended.

“The reasons behind this increase include, first of all, rapid revival of demand After the lifting of restrictions to contain the pandemic in a context in which production was limited,” said agency governor Pablo Hernández de Cos during his speech at the celebration of the 20th anniversary of Barcelona’s Institut de Economía (IEB) .)

,Inflation in the euro area has maintained a clear upward trend since mid-2021which has intensified in recent months, and is spreading, albeit to a lesser extent, to underlying inflation”, said the head of the Bank of Spain.

This Face-to-face conflict with the President’s defense of the government, Pedro Sánchez, and his economic minister, along with the First Vice President, Nadia Calvio, are the heads. The executive’s version is that prices skyrocketed solely and specifically because of the war in Ukraine and Putin’s preparation for it, and that this was an unexpected event and in the face of which little or nothing could be done.

Hernández de Casas, however, chronologically places this factor in second place and after the maintenance factor. “Second, there has been a sharp increase in the prices of raw materials in the international markets. In particular, energy prices have been affected by the short supply of gas. Geopolitical reasons and lack of maintenance infrastructure around the term of imprisonment”, he explains.

And along with all this he adds, “the presence of so-called ‘has also delayed recovery of supplies’.Hitch’, The pace at which demand has improved and the increased consumption of commodities due to the pandemic has burdened global production chains, which are still impacted by the restrictions of the pandemic in 2021,” he explains.

expected growth

For the coming months, Hernández de Cos predicts that “inflation will remain high in the coming months, but that, starting at the end of the year and in the absence of new inflationary disturbances, progressively slower,

However, he warned thatInflation outlook has increased upside risk“The greater persistence and intensification of inflationary pressures increases the likelihood that indirect and second-round effects will worsen,” he says.

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