Funcas panel raises its average inflation forecast by 1.5 points to 6.9% in 2022, a record since 1986

panel of analysts FunkasComposed of 20 of the most prestigious economic research services in the country, has grown its inflation forecast for year average up to 6.9% and from 5.4% forecast in March”fast translation high production cost For less volatile elements of the index.

In fact, according to these analysis houses, underlying inflation -which does not take into account the development of fresh food and energy products, the most volatile goods- Average growth of 3.6% in 2022Compared to the 2.8% they estimated in their previous projection, due to the contagious effect of price increases across the shopping basket.

Estimated average inflation will be Most registered in Spain since the year1986in which it is located 8,8%According to INE.

Although these are consensus figures, there are still significant difference Based on the study service: the most pessimistic forecast a Average inflation of 8% You Most optimistic, 6%. The gap is in stark contrast to the gap that existed two months ago, when pessimists were already predicting 7.8%, but positives expected average inflation to be 3.2%, which has been widely exceeded.

economic forecasting center The project of average inflation of the Autonomous University of Madrid is 8%, After that Spanish Chamber of Commercewhich is located in 7.6%, economic teamIn this 7.4%and consultant metisIn this 7.3%.

On the other hand, international financial analysts (AFI) Trust that the average CPI will moderate throughout the year until it reaches the average 6%, and study service Repsol and consultant oxford economics agree to keep 6,3%.

“The average inflation forecast for this year has increased by 1.5 percentage points to 6.9%. Panelists They expect it to decrease in the remaining months of the year ending with an annual rate in December 4.3%, About 2023, according to consensus, inflation will moderate at an average rate of 2.2%, with an annual rate of 1.8% in December. The underlying inflation, for its part, will be 3.6% and 2.4% in 2022 and 2023, respectively,” the Savings Bank Foundation explains.

Although they usually expect basic stands at 3.6%, some economists prefer Funkas they think it can reach be up one point, at 4.6%which indicates the risk of the price increase becoming more widespread.

Looking to the next year, panelists are confident inflation will fall on average 2,2%so close to 2% price stability level determined by the European Central Bank. However, some experts prefer them Spanish Chamber of Commerce they think he might still be 3,3% and others, such as Caxabank Research think it could go down even further 1.1%.

Experts warn that a rise in inflation could be imminent monetary policy tightening of central banks. “Geopolitical and supply disturbances exacerbate inflationary pressures, leading to monetary policy tightening. The Federal Reserve has taken the route of raising interest rates, the expansionist wave of which has been transmitted through financial markets.”

Panel recalls that it translates into declared end of change public debt purchase program and the private ECB—both introduced during the pandemic and the previous ones—to force states Financing new debt issues in the markets, without the support of a central bank. The ECB has also given clear indications of its intention to increase the deposit facility, which has been in negative territory since 2014.

,The challenge is to control the effects of the second round of energy inflation, without causing financial stress in the euro area as it happened in 2011″, he warned.

GDP grew by 4.3% and employment by 2.9%

Panelists estimate that Rate of interest During the forecast period, market prices will continue to rise until 2023, and that the upward cycle will be significantly more pronounced than anticipated in the previous panel. By consensus, Euribor will reach 1% at the end of the forecast period and 10 year bond yield above 2.5%

Experts who were part of the Funcas panel have also taken advantage of the updated outlook to cut their growth forecast for GDP (Start) from 6% they estimated in March up to 4.3%, in line with downward revisions made by organizations such as the Bank of Spain, the European Commission or the International Monetary Fund. By 2023, they put growth at 3%.

With regard to the labor market, the panelists expect that Average annual unemployment rate will continue to fall to 13.7% in 2022 -two tenths less than the previous panel- and 13.2% in 2023.

This slowdown is due to the fact that, according to the Active Population Survey (EPA), employment grew by 1.1% in the first quarter of the year, once seasonal effects have been eliminated, which represents a The growth rate is slightly lower than the last two quarters. In addition, affiliation to Social Security” points to a slowdown in job growth in the first quarter of greater magnitude than indicated by the EPA.

,Average estimate for 2022 has been reduced by six tenths to 2.9%, while the forecast for 2023 is 1.9%. From the growth forecast for GDP, employment and wages, the implicit forecast for growth in productivity and unit labor cost (ULC) is derived. productivity per full time equivalent job 1.4% growth this year and 1.1% in 2023. For ULCs, they will increase by 1% in 2022 and 1.2% in the next year,” he explains.

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